Robo Advisers

Apologies for not writing anything last week, I do have a good excuse though.

We were down to the Nucleus Annual Strategy event at the end of last week at The Belfry (unfortunately there was no time for golf).

For those of you who don’t know, Nucleus are one of our key partners providing us with one of the leading technology platforms in the market.

We particularly like Nucleus because they are a relatively small business (albeit with £8bn on the platform), they are based in Scotland and they have a similar culture to our own.

The other thing we like is they are not a traditional financial services company trying to sell clients funds and products.

But this blog is not about Nucleus, it is about the fantastic speakers from across the financial services world that were at the event.

It is so important for us and our clients that we spend some of our time hearing from leading voices in our industry.

This helps us formulate ideas that we can bring back to the office and put into practice to the benefit of everyone.

My favourite presentation was from a chap called Michael Kitces who is a successful Financial Planner from the USA and a speaker all around the world.

He covered a range of topics, but the one that really stood out for me was robo-advisers.

In this age of technology and limitless information, so-called robo-advisers have started cropping up on the internet.

These are online platforms that will ask you a series of questions and then provide you with an asset allocation and fund selection, essentially DIY investment.

They will never take over from real financial planners.

However, if all that an adviser offers their clients is an investment selection and asset allocation then they will be a threat.

In Michaels words ‘Because of their simplified business model, none of the robo advisors are currently prepared to offer personalized, individual advice on retirement, college education, estate, tax, or insurance issues, nor even to help with the basic budgeting and cash flow planning. They provide a diversified, passive, strategic portfolio and rebalance it. Period.’

So assuming Michael is right at no point should you ever walk into our office and deal with anything other than a human being (I hope).

I am sure I will come back to some of the other topics he covered over the next few weeks particularly how we can use technology to interact with our clients to give everyone a much fuller experience.

Please feel free to emailTwitterFacebook or even telephone me should you have any questions about this or any other topic we cover.