Automated advice to edge out the traditional: Decimal

Speaking to ifa's sister publication AdviserInnovation, Decimal chief executive Carolyn Colley said the only barrier to automated advice replacing traditional advice methods is that it cannot engage in face-to-face relationships.

Ms Colley said that while the relationship side of financial advice cannot be replaced, the maths and recommendations that sit behind it can.

"I think, generally speaking, most people now start a purchase journey online – whether it is the research phase or looking for someone to speak to – so much of the advice process is commenced online anyway," she said.

"Using technology to automate the advice process for at least the basic advice needs around superannuation, insurance and retirement income is a massive opportunity."

Ms Colley noted that in the current investment environment, with returns edging lower, the value of traditional advice is being questioned.

"Certainly, lower investment returns have given a greater focus [to] the cost of advice," she said.

"When your returns are more like two, three, and four per cent, and you're paying 25 per cent of that to your financial adviser, I think that questions the value of an ongoing advice relationship."

People are in the future more likely to seek traditional advice for specific "trigger events".

"Fewer people will engage in an ongoing basis with a financial adviser, but I think possibly more people will see them when they have a trigger event," she said.

If people have access to an online automated alternative, this will likely take the place of an ongoing traditional advice relationship, Ms Colley concluded.