Financial advisers are capable of “thinking outside the box” and uncovering all the relevant information of a client’s situation – something digital products cannot do, argues IOOF.
In a recent statement, the financial services giant said that while robo services are adept at finding good investment products and can even consider a client’s appetite for risk, they should not always be considered financial advice.
“Many financial advisers can construct similar portfolios, however also provide the ‘human touch’. That is, the experience, empathy and emotional intelligence to know if this will truly help a client achieve their goals in retirement,” IOOF said.
“Financial advisers are able to ‘think outside the box’ to generate new ideas and uncover more suitable strategies across a wider range of complex issues such as tax minimisation, aged care, insurance and debt and whether a client’s money could be better invested elsewhere – such as in property or through super.
“What’s more, a computer won’t know if you’ve supplied all the information. While a human may also not know a client’s full financial picture, they will at least try to uncover all the relevant information, such as a student loan or alternative assets which a client might not consider.”
IOOF added that if robo-advice was viewed as a product, rather than an advice service provider, it can present an opportunity for advisers to take advantage of the technology.
“Computers will always be faster than humans at quarterly portfolio rebalancing, asset allocation or tax-loss harvesting, however, for most advisers these are not the most valuable use of limited resources,” the statement said.
“Outsourcing the time consuming business of portfolio management frees up time for advisers to focus on higher-value client engagement.”
While most clients will prefer human advice, it is not secret that robo-advice is here to stay, IOOF said.
“Since robo-advice is about putting people into financial products, this technology represents just a small part of the holistic advice offered by financial advisers. It’s the full spectrum of advice – across different advice areas, education, empathy and service – where true value lies,” the statement said.
“However, it’s more than that. Just as the value of a personal trainer is the motivation – and discipline – to succeed, the same is true for human financial advisers.”
A former Melbourne-based adviser has been hit with two charges around dishonesty...
The corporate regulator has revealed how it comes to decisions on the informatio...
Following the announcement of a new joint venture with US investment manager Are...