Robo-advice critics lack big picture understanding, CEO says

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The trend of robo-advice has drawn some detractors, but the CEO of a major financial services franchise has said the platform is a valuable way to engage customers.

Yellow Brick Road chief executive Matt Lawler has told Wealth Professional that robo-advice has often been unfairly generalised. Lawler cited a recent Ernst & Young report that concluded robo-advice can take the form of guided and facilitated service, self-service or automated investment.

"Robo-advice is attracting some detractors in the financial planning world, as some see it as just another product selling tool or a threat to a financial planner’s livelihood.  However, robo-advice is much more than this. We are not suggesting replacing human interaction solely with robo-advice but we are talking about changing the way we engage potential customers to take away any apprehension they may have, reduce the complexity and make the advice more affordable overall," Lawler said.

Lawler said YBR supported removing many of the technical or operational tasks in financial planning in order to make it more affordable. But he said this would not be done at the expense of personalised service.

"It is critical to have an equilibrium here, between the professional and the programme, making planning more accessible and scalable," he said.

Lawler argued that the franchise's Guru platform is sophisticated, but ultimately provides advisers a tool by which to engage consumers.

"Algorithms alone are important and insightful, but the real power is in weighing the context against the unique vision a customer has for their life and money.  The focus of the adviser shifts to the person and not the engineering. One person’s view of a ‘comfortable’ life or retirement may dramatically differ to another’s," Lawler said.