Bahaa Abdul Hussein is a Fintech expert and shares his experiences with his audience through his blogs. This time he discusses how to tackle a Robo voice.
Many people face financial difficulties due to complex tax laws, social security rules, increasing household debt and mandatory savings. Treasury is eager to let people use affordable digital advice solutions.
The benefits of robo-advice have been seen in the US market where young people and those in low income groups have been using this digital solution for financial recommendations. There is still a big difference between professional and robo-advisers. Professional advisers continue to maintain superiority over the robo-advice systems.
Comparing Professional and Robo Advisers
It all comes down to the client information quality. Professional advisers first collect lots of data about the client before giving any recommendations. Robo-platforms use only a limited set of data about the client to generate investment advice observed Bahaa Abdul Hussein.
They simply match the investment portfolio of the client to the risk tolerance. The platforms use a simple and short online form to gather more information about the clients. In the US, robo-advice is more in vogue because there the emphasis is more on investment advices.
Australian advisers on the other hand do not focus on one-dimensional advice. They offer holistic advice after assessing the client’s personal circumstances, financial capacity, future goals and risk tolerance. Advisers collect lots of client data which is then analyzed.
They offer their clients suggestions and recommendations only after assessing these details. They inform about financial challenges and opportunities. All this information makes the risks clear to the client.
The life insurance is a good example of this advice. Most people in Australia believe they carry sufficient life insurance using superannuation fund. However, they still have an insurance requirement. They receive this information only when they visit a professional financial adviser. Many people have estate plans that carry high risks.
Some have no estate plan at all. Advisers use a fact-finding datasheet to gather information about the client. They collect details of the client related to the debt management, insurance policies, retirement plans, real estate plans and investments. They also study the client’s education funding, travel and other major financial requirements.
Detailed Assessment
Professional advisers with this factual datasheet in hand can assess a client’s financial capacity for new investments. They are upfront in providing information that protects the client’s interests. While this detailed assessment makes them better than robo-platforms, they continue to use manual methods for data collection. It makes them different from the robo-advisers that deliver advice in real-time at the click of a button.
Robo-advisers are not a big threat for professional advisers for now. With their strong relationship with clients, professional advisers are better placed to offer recommendations that suit the investment needs of the client. Robo platforms remain limited to handling the basic financial advice. It is important for the professional advisers to use latest technologies to increase client engagement and deliver services in a better way.
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