Wealth firms ‘should be concerned’ by digital advice platforms, claims GlobalData

Financial advisory firms “should be more concerned” over the rise in popularity of digital finance advice platforms, according to data and analytics firm GlobalData.

In its UK Independent Financial Adviser (IFA) Survey, GlobalData revealed that just 6.3 per cent of IFAs are concerned about client-facing robo-advice from technology or applications entering the advisory space.

However, the data and analytics company warned that as robo-advice can now no longer be avoided by the largest wealth management firms, IFAs “should not be so oblivious” towards such innovation.

Commenting, GlobalData wealth management analyst Sergel Woldemichael said: “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. It is designed to guide people through a financial health check, before offering personalised recommendations on building longer-term savings and investments.

“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,” Woldemichael continued.

He concluded by highlighting that 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.’’

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