The active role technology plays in the delivery of financial advice is set to change in the short to medium term and will eventually assist practitioners to build much-needed scale into their businesses, a digital service provider has said.
Ignition Advice chief executive Mike Giles noted that until now digital or robo-advice had always been a binary proposition where advice delivered was either all digital or all interpersonal. This dynamic was consistent with the traditional advice model itself, Giles said, where the philosophy was an individual receives comprehensive advice or none at all.
However, he forecast this model is set to change.
“Digital advice has evolved from the days when it was envisaged that robo-advice could be a stand-alone online offering. Now there is recognition that human interaction and intelligence needs to be a vital component of the advice offering,” he said.
“Technology is going to start to bring gears to advice so that there’s more nuance and by bringing customers into the mix so that they can participate in doing some of the heavy lifting, means that we get scale and the cost of advice goes down.”
To this end, Ignition Advice is currently in discussions with large financial advisory institutions regarding the new role it can play in streamlining the advice process.
According to Giles, this involves having Ignition Advice assist advisers with elements such as the fact find for the client and from there determining what the individual’s advice needs are.
He pointed out, unlike other robo-advice models, Ignition Advice does not make any product recommendations as part of its offering. Instead, it formulates a strategic plan, shaped by the algorithms employed, that is deemed appropriate for the individual in question.
The advisory practice can then use this information to provide additional advice, such as suitable products in which they should invest, and implement the relevant aspects of the strategic advice the technology has arrived at.
