Advice technology specialist Ignition has proposed that digital capabilities can enhance the advice business model in market study ‘reimagining financial advice’.
The hybrid model is said to make advice delivery up to 80% faster for firms and is shown to already aid advisers working with M&G Wealth.
Ignition, the global provider of advice technology, and Altus Consulting, a specialist provider of consultancy services to the financial services sector, have launched a blueprint for improving the use of digital capabilities in the financial advice market.
The paper provides recommendations for how the UK market can reduce the advice gap and ensure appropriate, affordable financial advice is available for all that want it.
Previous analysis in this space has typically endorsed either ‘robo’ or traditional, human advice. However, ‘Reimagining financial advice’ proposes a new model: hybrid advice.
Hybrid advice involves the use of technology to enhance, rather than replace, the work of the financial adviser.
Terry Donohoe, CEO Europe, Ignition, states: “the pandemic and the accompanying social distancing measures have forced us to rely on technology more than ever before. In some areas, this overnight change has provided a much-needed impetus to encourage businesses to re-think old habits and provide what is actually a better consumer experience.
“We have seen that there is real demand in the UK financial services market for true digital advice, which seamlessly combines technology and human expertise to provide an easy-to-use service that helps customers make better financial decisions. As our whitepaper shows, there are still significant hurdles to clear before this model becomes the norm, but we are now closer than ever to revolutionising the advice industry and closing the advice gap.”
The paper also includes a review of how M&G Wealth, the global wealth manager, has been working with Ignition to implement a hybrid advice platform for both new and existing clients.
Sam Turner, consultant at Altus Consulting, claims: “despite recent advances in technology, the current UK advice landscape is testament to the fact that pure digital advice remains a challenging proposition to deliver profitably. The initial hype around so-called ‘robo advice’ seems to have cooled and the industry is now turning towards a more hybrid model, which works in various forms to combine digital tools and human expertise.
“The recent rapid shift in working habits brought on by the pandemic has done a lot to accelerate change in the sector and alter attitudes towards the use of digital capabilities. The market may well be primed for a significant and lasting digital transformation but implementing change on this scale is never a straightforward matter and our research has identified a number of key challenges that businesses will need to overcome over the next few years.”