AI is the next big thing, and I am not just referring here to my company brand. I mean artificial intelligence, or so-called machine learning technologies. The impact for financial advice and advisers is positive, profound and, I have to say, imminent. When global information technology research firm Gartner issued its strategic technology predictions for 2017 last October, artificial intelligence and advanced machine learning themes led the top 10. As Gartner's report states: "During the next 10 years, virtually every app, application and service will incorporate some level of AI in much the same way as consumer appliances have incorporated microprocessors.
In the report, titled The truth about Gen X and Gen Y, ING Direct found that contrary to common assumptions, Gen Y in fact prefers face-to-face advice over robo-advice. "It's refreshing to see that the more digitally-savvy younger Australians recognise the value of face-to-face financial advice," said ING Direct head of third-party distribution, Mark Woolnough. "This shows that while there is a place for online solutions, they should complement personal advice relationships and not be at their expense," he said. Mr Woolnough noted that the net wealth of Gen X and Gen Y currently sits at approximately 1.4 trillion. "Coupled with an intergenerational wealth transfer of 2.4 trillion occurring during the next three decades, that's a huge opportunity for advisers," he said.
Financial planning can often be a very stressful and confusing experience. Exploring and deciphering numerous different investment options and strategies in order to target specific future financial goals is not a process which many people tackle with relish, if at all. Nevertheless, an ageing population, escalating student debt, rising house prices, not to mention the introduction of pension freedoms, mean that many more consumers will now face important and irreversible decisions about their finances, in some cases, for the first time in their lives. A growing need, therefore, exists for robust financial advice to be made more readily accessible to all. Robo advice has the potential to form the cornerstone of any solution by helping to deliver advice in an affordable, compliant and user friendly manner to everyone, at all stages of their lives.
Simon Binney, Wealth Wizards: the future of robo-advice is now! While we know that robo-advice is here to stay, who is actually using it? There has been much debate and discussion about user demographics; both those of today and those in the future. While it is easy to speculate that it must be the digital-savvy generations and those comfortable with online transacting, it would be foolish to ignore huge swathes of the population as potential non-users, whether they be baby boomers reaching retirement age or the "already-retired" looking for urgent help and solutions. New reports and research not only shed light on the changing comfort levels of the nation when it comes to robo-advice, but they also confirm that robo-advice has appeal to groups that might have been dismissed by the financial advisory sector only a few years ago.