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Gen III robo-adviser to solve ‘shortcomings in existing offerings’

An Australian risk profiling firm and a US based financial services software provider have teamed up to launch a Generation III robo-adviser tool that aims to address “shortcomings in existing offerings”.

Australian risk firm FinaMetrica has partnered with US based PlanPlus to launch miPlan - a robo-advice tool designed for investors and created to fully integrate current financial services best practices.

In a statement released yesterday, FinaMetrica and PlanPlus said miPlan has been created to address the shortcomings in existing Generation I and Generation II robo offerings.

“Generation I and Generation II robo-advisers are quick but they’re not good,” FinaMetrica’s co-founder and director Paul Resnik said in a company podcast on Tuesday.

"We are uncomfortable with the perfunctory ways in which the discovery process is typically handled by current robo platforms, as well as the marginalisation of the risk capacity discussion and the fact that the results of plans aren't tracked over time," PlanPlus chief executive Shawn Brayman said in the statement.

MiPlan has a profiling process built around an algorithm that integrates risk tolerance, financial knowledge and experience, risk need, risk capacity and investing composure, the statement said.

Off-ramps identify prospects who should not be using an online advisory solution and redirect them to appropriate channels, while financial behaviour is tracked and compared to plan projections in order to gently nudge those who drift off course by not respecting their savings targets, or identifying other forms of remedial action that might be required, the statement said.


MiPlan is also designed to be a multi-currency, multi-jurisdiction and multi-language platform, the statement said.

“The first generation robo-advisers were a test to see if individuals are willing to put their money into a portfolio where they aren’t familiar with the process - it was earlier territory for consumers,” Mr Resnik said in the podcast.

“We’ve seen, particularly in America, that there is a marketplace for that, however we would categorise that as an entrepreneurial robo - it's not a safe place for an enterprise or a brand. Robo 3.0 brings into play all of the things we’ve learnt about suitability and fiduciary behaviour over the last 10 years. It means the enterprises using Robo 3.0 may not make as many transactional sales but will be able to apply its robo against its legacy products with existing clients knowing that there is a quality planning process being applied.”

MiPlan has been designed as a “drop-in” application for firms that already have asset management and execution platforms, and will launch this November.