What types of planners were surveyed?
Background of the survey participants – reaching a broad section of the adviser community.
Given the industry survey was to ascertain adviser’s attitudes towards Robo-Advice, it was important to understand the type of financial planner being surveyed.
How many years have you been with your current dealer group?
What sort of advice do you currently provide?
The majority of advisers (84%) surveyed offered comprehensive planning services, with only 10% offering scaled advice-only solutions.
How familiar are you with the concept of Robo-Advice?
The concept of Robo-Advice has unquestionably entered into the mainstream industry conversation, with 79% of advisers surveyed being familiar with it. Only 21% of advisers were unfamiliar with the concept of Robo-Advice.
What is your overall attitude towards Robo-Advice?
The majority of advisers (55%) surveyed were aware of Robo-Advice and not concerned about its potential to disrupt the advice industry, with 12% of these advisers actually excited about its arrival.
Around a quarter of advisers were aware and concerned of the impact of Robo-Advice on their business. Only a small amount of advisers (5%) considered themselves apathetic towards the rise of Robo-Advice.
Which client demographic do you believe will be most inclined to use Robo-Advice?
Just under half of advisers (48%) believe that the Gen Y demographic is most suited to Robo-Advice, followed closely by Gen Z (42%).
Surprisingly, less than 10% of advisers thought that Robo-Advice would be suited to Gen X clients.
There are two factors at play here, firstly the likelihood of each demographic to be at ease with robo technology, and secondly, the relative investing power of each demographic. While generation Z’s disposable investable assets are still relatively low, advisers understand that their willingness to use technology to manage their financial affairs leads to a strong belief that Generation Z is suited to Robo-Advice.
Which client segments do you believe will be most inclined to use Robo-Advice?
This confirms the widely held belief that Robo-Advice will be implemented at the Bonze and Silver client segments. Less than 9% of advisers surveyed thought that Robo-Advice would be used by their gold and silver clients.
Do you think ASIC should have special legislation for Robo-Advice?
The majority of advisers (52%) polled, thought that ASIC should intervene and limit the scope of Robo-Advice in some form.
The percentage of those that thought that the scope of Robo-Advice should be limited by ASIC was fairly evenly split between limiting Robo-Advice to non-product advice only, limiting to RG200 scope only, and limiting to intra-fund advice only.
Do you believe Robo-Advice will increase or decrease the number of clients that seek advice from advisers?
These results indicate the potential of Robo-Advice to polarize the planning community.
A plurality of advisers believed that Robo-Advice will actually increase the total pool of people coming to see them for advice. 37% of advisers thought that Robo-Advice will increase client numbers by increasing participation rates from silver and bronze clients, and potentially escalating them to full advice if appropriate. This is potentially a good sign for the burgeoning Australian Robo-Advice industry – if advisers believe in the potential of advice escalation, this indicates their intention to work with the concept of Robos rather than fight it.
However, 28% of advisers through that Robo-Advice will result in a reduction in clients seeking them out for advice, as Robos eat into the lower end of their client base.
If you implemented Robo-Advice, would you want to charge clients for this self-help advice?
Of those advisers considering implementing Robo-Advice, 51% intended to offer it for free or at a discounted rate. Only 20% of advisers thought that it would appropriate to charge clients for Robo-Advice.
Has the Concept of Robo-Advice come into your business strategy as yet?
Unsurprisingly, the overwhelming majority of advisers (71%) have not yet considered the impending Robo-Advice services into their business planning. 11% of advisers have taken into account the rise of the Robo when it comes to their strategic business planning. While it is clear that advisers are taking Robo-Advice seriously, there is still clearly a lot work for advisers to do when it comes to positioning themselves strategically against potential Robo-Advice competitors.
Do you believe that Robo-Advisers are going to compete against advisers, or be a technology tool for advisers?
Around one quarter of advisers expressed still being unsure as to whether Robo-Advice would be a competitive threat, or a competitive boon to their business.
45% of advisers thought that Robo-Advice would ultimately be used as a tool for advisers instead of seeing it at as a competitive threat.
One thing is certain from these numbers – advisers are already taking the challenge – or opportunity, very seriously.
Which of the following reasons is most likely to be behind the success of Robo-Advice?
Advisers thought that if Robo-Advice were to succeed in Australia, it would be because it is a good fit for those with simple financial circumstances, or because it will be a good match for those comfortable using online tools.
Which of the following reasons is most likely to lead to the failure of Robo-Advice?
Advisers who thought Robo-Advice would not be successful, cited their main reasons as – people being uncomfortable with wealth management and requiring personal guidance, and Robo-Advice being unable to give accurate advice as their client’s circumstances become more complicated.
Who do you see best placed to create a Robo-Advice system?
Unsurprisingly, most advisers see financial planning software companies as the organisations best placed to create a Robo-Advice system. Financial planning software providers are in a position to be able to leverage of the current advice systems, workflow engines, PlanBuilders, data feeds, product replacement and portfolio review modules. Clients originated through a Robo- Advice module will be accessible via the financial planning system for later potential escalation to comprehensive advice.
Only 22% of advisers thought larger enterprises such as banks to be best placed to create a compelling Robo-Advice tool.
In contrast to the American model, where many practice/advice firms are developing their own robots, only 2% of Australian practices see themselves to be placed to develop their own robot.
Overall, do you see Robo-Advice as an exciting opportunity or threat to your business?
Contrary to the negative commentary seen in various media outlets of late, the majority of advisers are not seeing Robo-Advice as a competitive threat. Over two thirds of advisers see the rise of Robo-Advice as an opportunity to increase the amount of Australian seeking advice.
If some of the major Australian banks are developing Robo-Advice, do you think you will lose clients to these robots?
Advisers remain largely unconvinced of the impending threat of the large banks developing Robo-Advice. Only 20% of those surveyed believed that robots backed by the large banks would have any impact on their client base.
If you had access to a Robo-Advice function, would you promote its use to your clients?
A surprisingly high number of advisers would promote the use of robots to their clients.
Of the advisers surveyed, 30% of advisers would activity promote the use of a Robo-Adviser so their clients see they are keeping up with the latest technology. 52% said that they wouldn’t overly promote the use of Robo-aAdvice, however they would let their clients know that it would be an option for them if desired.
What percentage of advice do you believe will be written by a Robo-Adviser in the year 2020?
A clear majority of advisers believed that by 2020, Robo-Advice would responsible for around 10-30% of financial advice generated in Australia. These advisers believed that only simplistic areas of advice can be automated and clients will still prefer human involvement for the majority of their advice.