Although robo-advice may be popular enough to be put into the dictionary, not many independent financial advisers actually offer automated advice.
Only three per cent of 162 advisers surveyed said they offered fully automated wealth management services, the research found.
The study, which was conducted by research firm Platforum on behalf of JP Morgan, also found that only 14 per cent plant to implement it in the next two years.
Many surveyed said automation just didn’t fit their business model or clientele. Another reason is the cost. Respondents said automation took too much time to implement and were also concerned about security, integration, and cost.
Those who plan to offer robo advice will do so to diversity and automate smaller portfolios.
Speaking at a Money Marketing panel about the study, JP Morgan Asset Management managing director Jasper Berens said technology provided many opportunities for the sector.
“It is a golden age for advice,” he said. “You have got eight million investors through automatic enrolment. They will have a decent chunk of money and they will want some advice around it.”
The banking giant is in the midst of developing its own robo-advice platform in the US, according to CEO Jamie Dimon’s annual letter to shareholders.
Other banks have also ventured into the sector, such as Wells Fargo and Santander UK. In the US, Bank of America’s Merril Lynch is launching a service this year, and Citigroup invested in the largest robo adviser, Betterment.
This article first appeared on www.roboadvicenews.com