Algorithm-based 'robo advice' platforms are rapidly evolving into sophisticated financial planning systems that can learn on the job, says ANZ.
Speaking at Pershing's Discover conference in Sydney last week, head of distribution of ANZ's E-Trade Andrew Shade said "if you ignore robo advice it will roll over the top of you".
"In 1997/1998 they were talking about online broking as being a whimsical thing that won’t get off the ground – look at it now," Mr Shade said.
Robo advice is "massive" globally, he said, and "it is coming, and it is getting smarter".
ANZ has recently teamed up with IBM to use 'Watson' – IBM's super computer that famously took on contestants in the US game show Jeopardy – to create a financial planning support tool.
Watson is unique because it has the ability to actively learn, said Mr Shade.
"We use it at our Grow Centre in [Sydney]. You can go in there and punch in a questions and it will give you an answer.
"This is slightly different to what we’re seeing in the robo advice market in North America which is largely driven by algorithms.
"As products like Watson are developed, you will see much more sophistication coming into the advice market," Mr Shade said.
However, Mr Shade acknowledged that "a lot of robo advice is vertical because they’re selling their own products down the pipe".
"It will fill that middle ground, with a lower cost to service [clients].
"But I’ve been in this business for a long time and I always hope that it’s a contact sport – a people business.
"I’d much prefer to deal with people. So I think it services a segment of the market but I never want to see it take over the business," he said.
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