The ever increasing buzz around digital wealth managers such as Nutmeg and Scalable Capital has financial advisors concerned.
Robo advice and large product providers going direct to clients continue to concern the majority of advisers, according to a poll.
Concerns over the cost of traditional asset management, increasing enthusiasm for passive investments and ever quicker march of digital technology has prompted the rise of disruptive wealth management.
At the recent Intelliflo Change the Game conferences held in Manchester and London the impact of this on financial advisers and para-planners was polled to more than 750 of those working as advisers or para-planners.
The question ‘What is the biggest threat to your business today?’ has been asked at three consecutive Change the Game conferences (2015-2017), with the top two consistently featuring as ‘robo advice’ and ‘large product providers going direct’.
This year, both these options gained equal top share in the poll (37 per cent each of 315 respondents). Other options included ‘General image of IFAs’ (14 per cent- well down from 29 per cent in 2015); ‘Other financial advisers’ (7 per cent) and ‘Banks/building societies’ (4 per cent).
Delegates were also asked ‘How much time do you spend thinking about the digital challenges of the future for your business?’ Of the 270 respondents, one in five (21 per cent) said they spend a lot of time, with just over a third (39 per cent) spending a ‘fair bit of time’ and around a third (34 per cent) spending ‘some time’. Only 6 per cent spend ‘very little time’.
Nick Eatock, Intelliflo’s Executive Chairman says it’s interesting to see how much time advisers say they are putting into thinking about the digital challenges of the future.
"Undoubtedly the increase in D2C robo advisers and the publicity surrounding them is having an impact and many advisers are waking up to the threats and opportunities offered by the digital route to business.”
“We are seeing a marked increase in take-up for our automated advice service, with progressive advisers keen to offer this option where full fat advice is not economically appropriate for certain clients.”