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Is robo-advice taboo?

An observation from my recent attendance at the AFA National Adviser Conference was the little reference to robo-advice.

It's not that I expected robo to be mentioned at every turn, it just appeared to me as though the word had been wiped from the conference agenda.

Has robo-advice reached the point where it's now one of the taboo terms among financial advisers?

Perhaps this was a strategic decision. Rather than place the attention on what clever robots can do, why not reinforce how much value astute human advisers provide to the advice experience.

It makes sense when the conference had a clear and deliberate focus on soft skills - or the tools human advisers need to best interact with everyday not-so financially savvy humans.

Emotional interaction is the easiest touch point in the case for human-based financial advice and throughout the conference several speakers tailored their presentations to this particular soft skill - Amy Florian's keynote being one of the highlights.

It's hard for robo-advisers to replicate this skill and it's one of the biggest challenges they face to gain further traction in the Australian advice market. The 'a-ha' moment will come for robo-advice when it can deliver the kind of emotional intelligence that engages humans well beyond the current screen-to-face relationship.

Futurist Chris Riddell opened the conference's keynote sessions where he talked about 'the human revolution'. You can gather that as a futurist, Chris' presentation was heavily weighted to technology but his main point wasn't focused on robo-advice per se, rather he decided to pinpoint blockchain as the next big move.

While robo-advice didn't appear to lead the technology discussions, cybercrime was one area that is clearly on advisers' minds. Midwinter managing director Julian Plummer performed a live hack and AUSTRAC said there are opportunities for financial advisers to value-add by providing cyber training services.

But really the takeout for me would be that robo-advisers will have to dabble in blockchain to stay ahead of the game. If blockchain delivers on its promise of data security then it could well establish the trust us humans are reported to be constantly looking for in our advisers and therefore it would give robo-advisers the platform to start tapping our emotional connections.

In the latest Financial Standard edition journalist Karren Vergara has dedicated her cover story to the robo-advice conundrum and looks at how both the traditional and new forms of advice might be able to work side-by-side. Association of Real Return Investment Advisers general manager Rebecca Jacques says smart robo-advisers will build in functionality where both forms of advice can co-exist.

We've also published all the highlights from the AFA National Adviser Conference and profiled SQM Research owner Louis Christopher.

1 comment so far

Yes, its true - at this point in time, it is hard for digital advice to replicate the soft skills that humans have. Although that will change over time.

However, many consumers aren't looking for soft skills. They are looking for speed, convenience and value. Human advisers can't replicate what digital advice is achieving across these dimensions.

So why isn't there more discussion at the AFA on digital advice? It starts with not having an agenda that is relevant to digital advisers. So the digital advisers hang out elsewhere. So many participants at the conference incorrectly believe that digital advice isn't happening. So when they go to put the agenda together again the next year, once again there isn't any digital advice content.

GREG EINFELD  |  6 NOV 2017   8.30AM
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