Advisers integral to robo success

Risk-profiling firm FinaMetrica has predicted that all major financial institutions will have a robo-advice function within the next two years, but emphasises that it must work in tandem with advisers.

FinaMetrica made the prediction as it announced a collaboration with NBK Private Bank Switzerland that will see robo-advisory tools rolled out to NBK's private bankers by the end of the year.

Paul Resnik, FinaMetric co-founder and director, said the robo-advice tool was developed to deliver suitable financial advice to NBK's clients.

"We are convinced that robo-advice will have its most effective application in conjunction with personal advisers working with existing enterprise clients," Mr Resnik said.

"NBK's private banking clients on average invest close to US$5 million, despite the popular myth that most people using robos invest much smaller amounts of money.

"We expect that every major financial institution will have a form of robo-advice in the next two years," he said.

"We believe that we offer the most defensible and reliable suitability tool set, which is at the heart of good robo-advice."

FinaMetrica's robo-tool is based on a 12-question scientific risk-tolerance test which takes into account investors' time horizons, capacity for loss, risk tolerance, and knowledge of investments. The end scores are mapped and paired to international multi-asset portfolios.

A spokesperson from NBK added that "this robo-adviser delivers a multi-asset portfolio that meets most clients' needs".

"The process still provides flexibility to fine tune recommendations to meet customers' individual circumstances," the spokesperson said.

 

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