Target market for robo-advisers to grow with net usage
Robo-advice does not work well in complex situations but suits people in their 30s and 40s who are already using the internet to manage their finances and are starting to save serious money toward retirement. Robos work very well where the investor’s situation is not complex and a person neatly fits into one of several predetermined categories. For example, the small but relatively focused subset of people in their 30s and 40s who are starting to save serious money toward retirement are perfect for robos. They may have already looked at negative gearing and margin lending to grow their savings but feel disinclined to take on the added risk in […]
Robo-advice not ’biased’ during volatility
Human advice may be outperformed by robo-advice during times of market volatility, considering automated tools are not subject to behavioural bias, says BetaSmartz. BetaSmartz chief executive John James said eliminating behavioural bias means that robo-advisers will accurately manage risk, and “will always have an advantage over humans”. Mr James argued that robos are not subject to a domestic or “home bias” to the extent that human advisers are. “This [domestic] bias can limit diversification and, in a volatile environment, completely exposing an investor to just one market may not be the optimal way to meet their goal,” he said. He explained that robo-advisers can easily navigate volatility because they have […]
Announcing a new partnership: Republic Wealth Management
Sharesight are pleased to announce a new partner, Republic Wealth Management. Republic is a robo-adviser catering to financial planning companies. They take care of the portfolio construction, execution, and on-going management of portfolios on behalf of financial planning companies. The portfolios consist mainly of ETFs. Republic and the advisers they serve will be utilising a branded edition of Sharesight and API to administer and report on client portfolios. This B-to-B approach makes sense. One of the challenges for any asset manager is convincing people to hand over money. This is especially true in the online advice space, which by nature lacks face-to-face meetings and a track record. Portfolios constructed of […]
The rise of robo advisers
The notion of robots delivering financial advice is one of the hottest topics in financial planning circles. Even Australian Securities and Investments Commission chairman Greg Medcraft has weighed in, saying “robo advice” could slash investment costs and eliminate conflicts of interest. Judging by the number of new offerings coming on the market, this will be a growth sector, but how easily will people accept advice delivered by rules-based algorithms? The most common answer is that “millenials” will lead the way on “robo-advice” take-up, as they trust technology in a way their forbears do not. The cost of delivering advice is generally estimated at one-fifth to one-tenth of fee-based financial advice, […]
Macquarie targets robo-advice at mass market
Macquarie Group is targeting retail investors and self-managed super funds with a new robo-advice program that will provide detailed recommendations matched to customers’ investment priorities. The bank will next month launch an online tool allowing customers to buy investment advice covering asset classes including shares, exchange traded funds, and managed funds from around the world. Macquarie Wealth Management chief investment officer John O’Connell said the advice would draw on a database of 30,000 investment options globally. OwnersAdvisory is aimed at selling lower-cost investment advice. After gauging customers’ risk profile through an online questionnaire, Mr O’Connell said the program would produce “a written outline of exactly what we would do if […]
ASIC’s Greg Medcraft says ‘robo advice’ can reduce fees and conflicts
Australian Securities and Investments Commission chairman Greg Medcraft says computer-generated financial advice, or “robo advice” could slash investment costs and eliminate conflicts of interest in the maligned financial planning industry. ASIC has established a “robo-advice taskforce”, which is investigating the suitability of potential entrants, who use computer algorithms to match investors with suitable assets at a lower cost than human advisers. ASIC wants to know how they intend to comply with best interest duties, how algorithms are developed and tested, and how the people running the start-ups are trained and compensated. In a speech to a Finsia lunch in Sydney on Thursday, Mr Medcraft said ASIC believed digital financial advice […]
The FinTech future is here
Viewing the below chart of web searches, you could be forgiven for thinking that fintech has only really emerged in the past year. But the financial services sector has been innovating with technology for centuries – so why has it got so big recently? Source: Google The coming together of financial services and technology is nothing new. It will come as no surprise to know institutions have been using technology to improve their middle and back offices for as long as computers have been around. We used to call this banktech. In fact, banktech can be traced back to the 18th and 19th centuries when traders would use carrier pigeons […]
Why Fintech Is The Most Important Industry Right Now
This is a fantastic article on Australian FinTech. And it’s also great information to pass onto those who don’t understand what FinTech is and are unaware of how they can benefit from using Australian FinTech products. Fintech is beginning to disrupt the financial world as we know it. The financial industry is now more focused than ever on technological innovation than at any other time. It’s so important, Malcolm Turnbull referred to it in his first speech as PM. But, for those unfamiliar with the term, here’s a quick explainer. Put simply, Fintech is financial technology; a digital revolution. It’s about major changes to asset management, business and personal loans, […]
