More than a third of firms attending the Corporate Adviser summit plan to launch a regulated robo-advice service in the next 12 months.
Speaking at the Corporate Adviser summit on Friday PWC partner Steve Folkard said the advent of digital advice solutions will challenge retail financial advisers and paraplanners as they will come under increasing cost pressure, but will present an opportunity for corporate advisers who will be able to access more people in a cost-effective way.
In a poll at the event, 37 per cent of 40 EBCs and corporate advisers said their firm planned a digital regulated advice launch within the next year, with 21 per cent planning a launch within the next 6 months.
LV= has brought a digital advice offering to market with a price point of £199, and Folkard said in future there was no reason why prices could fall even lower. This would, he argued, put cost pressure on face-to-face advice, although he agreed that advisers operating in this space would still find customers prepared to pay for a personal service.
The most common route to market for corporate advisers is to white label a provider offering, the preferred option for 30 per cent of those polled, with 24 per cent planning to buy in software from a third party and 14 per cent building their own proposition.
Folkard said: “Technology will replace people who know a lot of stuff and can remember a lot of things. Most at risk are financial advisers and para planners.
“First generation digital advice is relatively simple. Second generation will link with existing tools and databases to help target prospects with the best advice.
“Third generation cognitive AI model will be applied is a cost effective way so advisers can access markets that aren’t currently available. Third generation makes advice available to markets that can’t afford it at the moment.”
How soon, if at all, is your firm planning to deliver regulated advice digitally?
1. Within the next 6 months 21%
2. Within the next 12 months 16%
3. Within the next 2 years 3%
4. We are considering it, but are not sure when 26%
5. We have no plans to 34%
How are you planning to develop your digital advice proposition?
1. Build our own 14%
2. Buy in software from a third party 24%
3. White label a provider offering 30%
4. We have no plans to develop a digital ad 32%