"You could argue that we may not be too far away from some highly successful mortgage ‘robo advice’ businesses rising from the machines."
Understandably, our interest and commitment to all of this, whether it be the boom in mobile phones and subsequently tablets or for instance, something as ubiquitous now as ‘sat nav’, means that the technology pioneers continue to look for the ‘next big thing’.
Financial services advice provision is no different – it has been revolutionised by the advancements in technology from sourcing systems to platforms, from credit reports to affordability calculators. All have pushed the envelope and fundamentally changed the provision of advice and, by design, the role of the adviser in the process. The big question on everyone’s lips is, ‘What comes next?’
In the financial adviser space, the big debate has been around robo-advice and whether the systems being established and the algorithms being developed, are moving clients down a path where the adviser – in human form – will no longer be required. I read a recent article which suggested this process is moving beyond the client simply answering set questions to generate their risk profile, wants and needs, and the investments most suited to them. Apparently, we are not so far away from a webcam with face recognition software which can determine all of this without the need for any questions. What was I saying about science fiction?
There’s no doubting technology is already being utilised in many product areas by consumers without necessarily using the skills and talents of a ‘real life’ adviser. Take many of the consumer insurance needs – car, travel, etc - and we are already a fair way travelled down the road of no human advice intervention or presence; instead this is all about answering set questions, being provided with a list of options, with the end result often being the customer choosing on price rather than product conditions, criteria and options. Not ideal, in my view, but that’s the way we have moved.
In mortgages however, at the moment at least, we are not yet in a situation where consumers are often willing to ‘purchase’ in the same way. Yes, of course, consumers will source mortgages, will use the online calculators and the available sourcing to give them an idea of what might be available, but we are still looking at very small numbers who are willing to go right through the process to purchase the product in that way. Instead, when it comes to mortgages at least, they want the human touch and want to ensure they have someone providing advice and telling them they’re doing the right thing. Given the amount of money involved and the commitment they’re making, this is perhaps understandable.
However, we can’t truly say this will always be the way, and perhaps it will be a derivation of ‘robo advice’ which takes mortgage customers onto the next level. After all, highly intuitive programmes and software are already available which could quite easily take someone through the whole mortgage advice process online. Add in the more bespoke elements, like voice or face recognition, which would perhaps another layer to the advice process, and perhaps provide greater confidence to the individual that they’re making the right selection, and you could argue that we may not be too far away from some highly successful mortgage ‘robo advice’ businesses rising from the machines.
It may seem like a leap into the future, and advisers may be long retired before this business model threatens their place in the market, but let’s not be over-confident here. Look at how fast technology has moved in just the last five years – are we really saying that, in our working lifetimes at least, ‘robo advice’ won’t have completely reshaped the advice profession and our ability to provide mortgage advice?
I’m utterly confident that people will always want to deal with professional advisers when it comes to their mortgage advice needs, but this doesn’t mean they won’t also want to use the technology available and be tempted to ‘go the whole hog’ with it, if they gain sufficient confidence in the process and the protections it provides. We should therefore be guarded against believing the market is ours forever and ever in its current guise; instead let’s make sure we’re fighting fire with fire and utilising the technology we have available to make the experience more rigorous, slick, transparent, up-to-date and complete. Technology is not just a potential competitor but an enabler and as it develops, so should we, without forgetting that in all of this it’s the ‘advice’ part which is ultimately the most important.
