There is no doubt that the robotic revolution is firmly under way in the financial advice sphere: however, it seems that during times of market volatility only the humans will do.
The robo advice platform at Charles Schwab has been highly successful since its launch last March, raking up $5.3billion in assets under management. However, since December, with the markets in turmoil, it seems that clients have been reverting to call centres and live chats in an effort to calm their nerves with a significant uptick in both online chats and customer calls.
According to a report, clients have been asking questions about tax harvesting and their portfolios. Indeed even Betterment, one of the leaders in the robotic advice arena, has been giving personalised notifications to customers after an upturn in the number of emails and calls it had received over the last few weeks.
Reg Jackson, senior investment advisor for the JMRD Wealth Management team at National Bank Financial, believes this is proof that while robo advisors have a lot to offer, there will always be a place for human advisors too.
“I like the robo advisory offering and have spent considerable time learning about them,” he said. “Robo offers some fantastic online tools – they aren’t ground-breaking but they are slick and easy to use and the barriers to entry to this space are virtually non-existent. I expect that soon every larger financial company will have their own version of a robo offering.
“However, in times of volatility all clients get nervous or have questions and regardless of whether it is a robo or not, client service and availability needs to be increased.”
According to data published by Deloitte, robo advisors currently control around $100billion in assets. However, this is predicted to rise to between $5trillion and $7trillion by 2025.