Advisers who incorporate robo-advice tools into their practice will be able to grow their client base by serving a new cohort like millennials, according to clover.com.au.
Harry Chemay, chief executive of robo-advice platform clover.com.au, says by incorporating a robo-advice tool into their practice, advisers can service more clients without it being "cost prohibitive".
"There's no real way that younger Australians and people with less money can get high-quality advice, particularly from independently-minded advisers, because [the advisers] can't provide a solution at a cost that is bearable," Mr Chemay told ifa's sister publication, Adviser Innovation.
Mr Chemay pointed out that robo-advice removes the cost associated with the human element of providing advice. Advisers who offer an automated tool can grow their client base at a fraction of the cost.
"Younger Australians feel that they have something available to them, and by the same token, advisers feel that there is a way to build a nursery for younger clients who will become full advice clients at some point in time," he said.
Mr Chemay believes robo-advice and human advice can "blend together" to form a "hybrid" advice model, and more robo-advice platforms will be operating in the Australian marketplace in the next six to 12 months.
"This time next year, there will be a number of start-ups, like us, out there in the marketplace but there will very likely also be a few offerings from the large institutions like the big banks."
Mr Chemay said the take-up of robo-advice by institutions will place additional pressure on advisers to adopt some kind of automated advice tool.
"The question will be: do [advisers] build [their] own or do [they] outsource it and look for some sort of white label solution?"
SUBSCRIBE TO THE IFA DAILY BULLETIN
19 Feb 2018ANZ adopts insurance in super codeBy Staff Reporter
19 Feb 2018IOOF focused on FUA, not adviser numbersBy Tim Stewart
16 Feb 2018Compliance engagement low with rating agenciesBy Jessica Yun
16 Feb 2018Hub24 responds to ASIC allegationsBy Killian Plastow
16 Feb 2018ASIC flags changes to adviser registerBy Killian Plastow
16 Feb 2018Former adviser excluded from industry under ASIC EUBy Staff Reporter
- view all