According to a report authored by FinaMetrica’s co-founder Paul Resnik – titled The Robo Revolution: Robo Advice Market Commentary and Analysis – the rise of robo-advisers has been the most significant development in the financial planning industry over the last 30 years.
However, with all the hype behind robo-advisers, Mr Resnik stressed that it is important to make informed decisions on using or not using the automation tools as the end result could prove costly for planners.
“Robo-advisers are likely to be as great a disruptor to the delivery of financial advice as Uber is to public transport,” he said.
“It could be an expensive mistake to make an uninformed decision to operate a robo-adviser or to choose to disregard or dismiss them.”
Highlighting a number of impacts robo-advisers will have on the financial planning industry, FinaMetrica said they will force planners to rethink their approach to investments.
“Robos deal in very low-cost investment structures and that is going to challenge current thinking, current practice and profitability. Like ripples in a pond, over time the effect becomes unpredictable even when it started out very structured,” FinaMetrica said.
FinaMetrica also said robo-advisers will continue to feature prominently within this financial planning industry, and will undoubtedly lead some human roles being replaced.
However, the firm stressed that the overall impact of robo-advisers will be “overwhelmingly positive”.
“Don’t believe the gloom that says robos will replace human advisers. They won’t,” FinaMetrica said.
