Robo advisers on track to become “mainstream”, say speakers at Boring Money Annual Conference
Speaking at the 3rd Boring Money Annual Conference, Toby Triebel, CEO Europe at Wealthsimple said robo advice was on track to reach 5-10% penetration of the overall online investing market. This would put it firmly in the mainstream, with the key drivers consolidation, partnerships with traditional advisers and established financial services brands, plus an ongoing push for financial education.
He said: “When is robo-advice going mainstream? The tipping point for robo is 5-10% of the market and we’re on that journey. One driver is consolidation, but also integration and partnership with partners that offer different products across the vertical, and also with more traditional players.” He added: “The ongoing push for financial education will go a long way to increasing awareness.”
He believes the lines between traditional and robo will become increasingly blurred: “Traditional advisers will form partnerships with robo-advisers and robo-advisers will offer more traditional services in a new way. The number of players will be significantly lower, and it will be the ones with the best value proposition, and the best technical architecture that will win out. The term robo may not exist in five years’ time.”
Triebel believes that a hybrid model, combining technology and human advice, is the most powerful combination. The conference also showed little appetite for a robo-only model. Simon Rogerson, CEO of Octopus Investments and founder of Octopus Group, said: “I don’t think robo on its own will work and this will play out over the next couple of years. People can’t engage in that way. They want empathy and understanding. They want to know they have made the right decision. Technology can do 95%, but at the end, they need reassurance that they have done the right thing.”
Nikolai Hack, COO, Exo Investing, says that in the UK, the pensions system is complex and confidence levels are lower, so it makes sense to be able to pick up the phone. However, as people get more comfortable with artificial intelligence, they will grow more comfortable with robo-advice. “There is a question over how much we trust the AI, the robo, to manage your money. But the more we see other applications of AI, the more people get used to it. It is possible to achieve automisation and personalisation. Netflix and Spotify create completely personalised experience and we want to try to replicate something similar with machine-learning algorithms to manage money.”
Total assets in the online investing space have grown 15.3% to £218 billion to the end of Q2 2018, according to Boring Money stats, while the robo market is currently worth £2.3 billion.
For further information and analysis on the current robo advisor landscape, see Boring Money’s Robo Adviser Performance Report 2018.
Notes to Editors:
The Boring Money Annual Conference is now in its third year. Held at London’s South Bank on Wednesday September 26th, the event focuses on communication and how the investment industry can engage its customers better. With particular focus on the issues of risk, trust, data and value, the Boring Money Annual Conference combines talks, interviews, and panel debates with market leaders (from both within and outside of the industry) to highlight the best practices, opportunities and change within the sector.
About Boring Money:
www.boringmoney.co.uk is an independent research and content business which provides information, tips and Best Buys to consumers. The business conducts regular research with industry providers and consumers and looks at the developing DIY investment market from both the customer and provider perspective. Boring Money holds test accounts with over 25 providers and also holds regular focus groups and interviews with consumers to ensure regular input and feedback from the user perspective.
Founder Holly Mackay has worked in the investment industry for 19 years and is supported by a team of 10 researchers, analysts and marketing execs. www.boringmoney.co.uk is not regulated to give personal financial advice, nor is it regulated by the industry watchdog.