Adoption of technology by consulting firms is ‘extremely low’
Robo-advice, an industry that started to gain momentum in the UK after the launch of Nutmeg ten years ago, has seen one of the fastest growing story arcs in the wealth management industry.
In 2015, there were many launches. But now the number of launches in the robo-consulting space seems to have pretty much stopped.
In FTAdviser’s latest podcast, Mike Barrett, Consulting Director at Lang Cat, and Simon Bussy, Wealth Consulting Director at Altus, discuss what lies ahead for the future of robo-consulting.
“Large vendors have large customer portfolios and customer retention rates above 90%,” Barrett said.
“Wealthsimple had 16,000 clients that they were successful in acquiring during their lifetime in the UK. The likes of Hargreaves will get it this month, in terms of their normal run rate.
“So it’s a really, really tough market to break into and reality is coming home.”
But the rise and fall of robo-consulting has prompted advisers to look into their own businesses, guests suggested.
“The adoption of technology in consulting firms is really quite alarming,” Barrett said.
When asked what he thought of the term ‘hybrid advice’, Barrett said, ‘I’m a little cynical about the term’ hybrid advice ‘. […] A lot of the names and languages we use in the industry just don’t make sense to real people, and even worse – it acts as a barrier to engaging in what we want them to do. I wonder if “hybrid advice” is another good example of this. “
According to Bussy, advisers need to become more self-critical of their own business models and identify where technology can help them.
“How do you get the technology to do the heavy lifting? ” he said. “You get people to do the things that people are really good at, which is empathizing and conversing with customers. “
Bussy continued: “But the things a machine can do, flourish well and let the machine do it. Don’t have an army of people doing this stuff.
And “hybrid advice” doesn’t just mean automations. Bussy cited other examples of innovation, including the potential of a counseling algorithm that could help trainee counselors as a kind of ‘guide rails’.
To listen to the full podcast, click on the link above.