So-called robo-advice is not a credible means of tackling the UK’s advice gap say IFAs.
This is the conclusion of new research from the Prudential which revealed that less than one in five advisers believe that robo-advice could potentially close the advice gap for mass-market consumers and that almost half of advisers believe that it will not help close the gap. This, as the Prudential points out, is despite the recommendations in the Financial Advice Market Review that the FCA should set up teams to offer support to firms that are using automated advice and guidance models.
Although Prudential does believe that robo-advice could have a significant role to play in providing a more limited form of advice for some consumers.
Head of Prudential’s Business Consultancy for advisers Paul Harrison said: “Improved technology can bring greater efficiency, reduce costs and should help advisers to serve their clients better while continuing to run viable businesses.
“Advisers are more aware than anyone though, that receiving tailored advice to meet individual needs is the preferred solution for many clients. It is no surprise then, that our research reveals advisers are not convinced that improved technology will be a cure-all for the advice gap.
“However, at Prudential we recognise that robo-advice could have a significant role to play in the future, in bringing a more limited form of advice or guidance to those people who either feel they don’t need an individual service from a professional adviser, or can’t afford it.”