Advocis held its seventh annual ARA Symposium in Toronto Monday and one of the topics up for discussion was the continuing influence of robo advisors and what that means for full-service wealth professionals.
Dan Dagg, a senior manager with Ernst & Young’s Financial Services Advisory in the UK, was a speaker at the all-day event. He was there to present the UK experience. With the big banks making several robo-advisor announcements
here in recent weeks his speech was very timely indeed.
“Are they [UK banks] truly getting involved in robo-advisors as I understand it or are they using technology to support their advice? My view of robo-advisors is this whole end-to-end process,” Dagg explained to WP. “One of the problems with the retail banks is that they don’t quite understand how they can float this separate, very distinct proposition without inferring they’re getting advice.”
While Scotiabank’s Hollis Wealth division, BMO Nesbitt Burns and CIBC have all made plans to jump on the robo-advisor bandwagon, it’s no sure thing that the banks will truly embrace digital advice if the UK experience is any indication.
That’s because over in England the banks are treading carefully as a result of the ongoing regulatory questions being asked of robo-advisors and this relatively nascent technology.
“I used to work for Lloyd’s Bank and if Lloyd’s Bank launched something saying we’re going to offer a robo-advice proposition there’s potentially some dilutive effect there,” Dagg said. “‘What happens if it goes wrong? Can I complain that I thought I was getting advice from an individual?’ So, bottom line, the banks aren’t yet getting into robo advice.”
In Dagg’s opinion there are just too many questions at the moment.
“They’re trying to work out how they can get involved in it and trying to work out how they can serve this population?” said Dagg. “I met with one of the banks the other day and they are truly interested but they are reluctant go all the way because they are worried that there are systemic issues where the regulator comes back and says that’s not what we meant [by robo advice].”