The 2016 Investment Trends Robo-advice Report – which surveyed 9,000 online share investors and 1,450 advisers – found that 48 per cent of the adult Australian population have unmet advice needs relating to investing, tax, and retirement planning.
“The number of Australians receiving advice from financial planners has decreased substantially since the GFC, while the wealth of those receiving advice has risen in excess of 50 per cent,” said Investment Trends research director Recep III Peker.
“This has created a substantial advice gap, with many individuals underserviced. The rise of robo-advice comes at a time when the desire for advice is high, and it can make a difference to people who may not necessarily be able to afford advice.”
The survey also found that in the US, robo-advice usage is not limited to younger, wealthier tech-savvy investors, therefore should not be viewed as a Gen Y proposition.
“The advice gap spans the population regardless of age and wealth, and if robo-advice services can use technology to deliver tangible outcomes, it will ultimately benefit all investors,” Mr Peker said.
Meanwhile, the report shows that more financial advisers are optimistic about robo-advice, rather than worried. About 83 per cent of the surveyed advisers said they believe robo-advice is not a threat to the financial planning industry and has a place in the advice practice.
Just over 50 per cent said robo can help advisers focus on providing strategic advice, while 41 per cent said it could lower the cost of advice.
“In the financial planning world, robo-advice is much more than just automated portfolio recommendation and rebalancing tools. Planners see robo-advice assisting across the entire advice delivery spectrum, from the front to the back office,” Mr Peker said.
