New research suggests that investors are prepared to trust robo-advice, but only for investments under £1,000.
The research comes from online investment site True Potential Investor. The findings show that 65% of investors would use robo-advice for investments of up to £1,000, before then deciding to seek advice from a professional adviser.
Robo-advice is being introduced into the DIY investment market and is seen by many as a way of making financial advice more accessible. Investments are chosen and risks spread according to an algorithm.
The research also revealed that less than 10% of people would invest more than £5,000 based on robo-advice. What’s more, only 22% of investors would trust robo-advice as a full replacement to a professional financial adviser.
Managing Partner at True Potential David Harrison said: “Technology certainly has a big role in the future of personal financial management and advice, but we are not there yet. None of the technology on the market can truly be described as ‘robo-advice’, which would require very sophisticated artificial intelligence to work properly.
“Technology enables consumers to make small investments where it would not make sense to go through an adviser. Since we launched impulseSave, more than £30m has been saved by consumers in small amounts without the need for advice.
“Robo-advice is not going to replace financial advisers any time soon. For larger investments, I think people will still want to talk to another human being and our research supports this.”
Newcastle based True Potential is a financial services group which provides technology and business support services to UK financial advisers, and wealth management services for private individuals.
