Robot revolution moving to money
Robotic financial advice has been described as the most significant development that the sector has seen in decades.
But the report - The Robo Revolution: Robo Advice Market Commentary and Analysis - says that while robo-advice will have a dramatic impact, it will not replace humans.
“Robo-advisers are likely to be as great a disrupter to the delivery of financial advice as Uber is to public transport,” the report’s author, FinaMetrica co-founder Paul Resnik says.
“It could be an expensive mistake to make an uninformed decision to operate a robo-adviser or to choose to disregard or dismiss them,” he said.
Currently, Resnik says robo-advisers control less than 1 per cent of the Australian market.
But his report argues that “everyone in the financial services supply chain” could one day compete with an artificial counterpart, either as a direct-to-consumer platform or an extra weapon in the human financial advisers’ arsenal.
It warns that the client base of any adviser could be under threat if they ignore robo-advice tools.
The report notes that robo-advice platforms will need the same suitability standards as human advisers, but expects that they will bring down the base cost of advice, and put current fee levels under pressure too.