News & Advocacy
Research You Can Use: February 2019
ADISA's executive director, John Harrison, reviews current academic research touching our space and brings it to you in condensed, one-page highlights.
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The effect of robo-advice on the financial services community--and particularly financial advisers--looms large although there is little research at this point (ADISA is currently pursuing quantitative research on this issue). A 2018 qualitative study at the London-based graduate school of Loughborough University began in earnest looking at the effects of robo-advice on financial advisers in the UK[1].
Further, the research looked at the core service encounter of financial advice and described it this way:
Pre-Core Financial Service Encounter | Core Financial Service Encounter | Post-Core Financial Service Encounter |
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Even though the human softer skills were judged imperative to the empathy/trust dynamic, especially in the pre-core and core encounter phases, advisers noted:
“If we’re charging a fee then we have to be giving advice. We can’t ask the client what do you want to choose, we have to give advice.”
Although more quantitative research is just getting started on human vs. robo-advice performance results, it is probable that even the softest human skill elements will be augmented by the use of robo-advice. True, commoditized robo-advice at the lower net worth end is a sure bet to grow (perhaps to be diminished by some large scale nefarious event that will probably occur at some point—dampening the enthusiasm), it is unclear how much of human financial advice is to be governed by generational, cultural, and improved artificial intelligence influences. Research on those elements, we hope, will help advisers prepare and adjust in order to serve clients well into the future.
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