Australians are starting to think robot financial advisers might be a good idea

The use of automated investment services, or robo-advice, is still small in Australia but is growing fast.

The latest research by analysts Investment Trends shows 27% of online investors have heard of robo-advice, up from 19% just six months ago.

Robo-advice, the field of online investment and savings platforms where face-to-face is replaced with automated guidance and execution, is growing via a series of fintech startups in Australia including Stockspot.

“Many investors are taking notice of robo-advice, and have an interest in learning more about this potential digital disruptor in the financial services industry,” says Investment Trends research director Recep Peker.

“Robo-advice will take centre stage as more solutions become available, and as investors themselves begin to engage with these non-traditional advice models.”

Online investors typically see themselves as early adopters, with 56% saying they are among the first to try products and services new to market.

“Australians’ openness to new solutions is an encouraging sign for providers who are considering the robo space,” said Peker.

Almost half (48%) the Australian adult population have unmet advice needs, mostly for tax-related areas and retirement planning.

“The number of Australians receiving advice from financial planners has decreased substantially since the GFC, while the wealth of those receiving advice has risen in excess of 50%,” says Peker.

“This has created a substantial advice gap, with many individuals underserviced.

“The rise of robo-advice comes at a time when the desire for advice is high, and it can make a difference to people who may not necessarily be able to afford advice.”

As a whole, more financial planners are optimistic about robo-advice compared to those who are worried about its impact on their business.

The majority (83%) believe robo-advice is not a threat to the financial planning industry and/or has a place in the planning practice.

“In the financial planning world, robo-advice is much more than just automated portfolio recommendation and rebalancing tools,” says Peker.

“Planners see robo-advice assisting across the entire advice delivery spectrum, from the front to the back office.”

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Source: Australians are starting to think robot financial advisers might be a good idea | Business Insider