Financial advisory firms should be more concerned about the rise in popularity of digital financial advice platforms as they gain in popularity, says GlobalData, a leading data and analytics company.
According to GlobalData’s 2018 UK Independent Financial Advisor (IFA) Survey, only 6.3% of independent financial advisers (IFAs) are concerned about client-facing robo-advice from tech or apps entering the IFA space. However, as robo-advice can now no longer be avoided by the largest wealth management firms, IFAs should not be so oblivious towards such innovation.
Sergel Woldemichael, Wealth Management Analyst at GlobalData commented: ‘‘Both our Mass Affluent and Global Wealth Manager surveys show strong appetite for digital services with access to a human advisor, especially among younger generations. The recent launch of MyEva, an independent advice platform, will add an additional layer of competition to the UK’s already crowded advice market. With a new kid on the block, robo-advisors will have to up their game and pay greater attention to the advice component.’’
Introduced by UK fintech Wealth Wizards in July 2019, MyEva is a fully regulated, hybrid digital independent financial advisory platform available through employers and open to the public. The solution currently comprises a web app with chatbot capabilities. The product is designed to guide people through a financial health check, before offering personalized recommendations on building longer-term savings and investments, among other services. Pricing differs for each level of service, but there is also a free option.
For now, an aversion to high advice fees has benefited robo-advisors that have been able to attract those willing to forego personalized financial advice for automated investment options. However, offers such as MyEva that give customers the knowledge and tools to manage their finances and investments independently stand to gain market share from both robo-advisors and traditional financial advisors.
Woldemichael continues: “With offers such as robo-advisors disrupting the investment industry, it was a matter of time before the financial advice sector was disrupted. Digital IFAs are only in the early stages of market adoption and so are unlikely to fade away anytime soon.’’
Within 24 hours of MyEva’s launch, Multiply announced a summer release for its own digital IFA. MyEva is already being offered to a number of employers in the retail and public sector industries, proving the need for such a product.
Woldemichael adds: ‘‘Technology in the wealth industry has once again opened doors for the masses to receive advice and investment management. Innovations such as digital IFAs are inevitable and although they are unlikely to completely take over the industry, they will appeal to cost-conscious customers.’’