We visualise online interaction with intelligent advice engines in which
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the customer experience is potentially even richer, more personal, relevant and engaging than with a relationship manager or IFA
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the links between the client’s goals and the investment solution are more apparent, intuitive and reassuring
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the outcomes-driven investment solution is itself innovative
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the resulting commercial relationships are more trusting and durable.
This vision contrasts this with the state of play in these early days of online investment services. Existing UK and US robo-advice businesses like Nutmeg, Money on Toast, Wealthfront and Betterment are not truly innovating. They are merely replicating the offline suitability process for matching conventional volatility-positioned portfolio solutions to personal circumstances and preferences. Changing the means of access does nothing to alter the fact these are not relevant and not truly engaging.
The real innovation will come from quantitatively-managed portfolios delivering goal-specific outcomes in the form, at the time and within agreed and defined tolerances, as collaboratively planned initially, and then adjusted along the way, by interacting with a robo-advisor. These are richly personal and owned by the customer.
Conceptually, this is something that barely exists in the offline world (though it is what Fowler Drew delivers as a high-end service) and requires technology to be widely deliverable at lower cost than conventional portfolio management. It will be disruptive by demonstrating the redundancy of existing conventions for products and services, not just by providing an alternative means of access.
When thinking about robo-advice, it is probably more sensible to focus less on whether machines will dominate man but rather whether they will replace the toolkits used by human advisors, in a collaboration of man and machine. Customer preferences for the form of delivery or communication will vary and so both forms will co-exist: robots and cyborgs.
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