Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

How six IFAs are tapping into robo-advice

These six advice firms have launched their own robo-advice services.

The robo-revolution: Which IFAs are leading the way in the push towards automated advice?

The term robo-advice has rarely been far from our news pages this year, but there's fierce debate about its possible impact, or even what it actually is. Here, we've profiled six IFA firms who are embracing the technology, and looking to carve out a market for their own versions of automated advice.

So what does robo-advice look like in 2016, and is there a place for IFA firms to get involved?

The robo-revolution: Which IFAs are leading the way in the push towards automated advice?

The term robo-advice has rarely been far from our news pages this year, but there's fierce debate about its possible impact, or even what it actually is. Here, we've profiled six IFA firms who are embracing the technology, and looking to carve out a market for their own versions of automated advice.

So what does robo-advice look like in 2016, and is there a place for IFA firms to get involved?

Dale Kirkpatrick, financial planner, Navigator: Destination Financial Planning

Destination Financial Planning, the aptly named creation of Navigator Financial Planning, currently offers an investment only online service. This service allows clients to construct an investment portfolio that’s tailored to their needs. This involves a recognition of the client’s risk tolerance, with diversification being the key across the spectrum of risk profiles.

Destination will soon be launching financial planning and ongoing coaching offerings, in line with Navigator’s typical advice proposition.

'We got into it to help young professionals start to take control of their finances,' says Navigator financial planner Dale Kirkpatrick. 'We think our service is different because we are also offering basic financial planning using cash flow modelling'.

Kirkpatrick believes that Navigator's experience and reputation in financial planning stands it in good stead to be a leading robo-adviser.

Having said that, he doesn't view robo-advice as a replacement for face-to-face services. 'I don't think it's the future; it's just another string to our bow,' he says. 'We've found that clients still want and need a certain personal element, and very few have signed up without contacting us first. It won't replace financial planning as we know it today.'

Ruth Power, director of business development, Financial Management Bureau

Financial Management Bureau, based in Kendal, is also on board with the robo-revolution. The firm, which has over £250m assets under management, is closing in on the launch of its own robo-advice proposition.

FMB’s robo-advice will be a white-labelled service, utilising Intelligent Office’s CRM software. It features a personal finance portal, where clients can view all of their information and receive up-to-date valuations. ‘It’s going to be really useful for clients,’ says director of business development Ruth Power, who informs us that clients can build in their financial goals and upload information from their bank accounts.

The second element to the service involves a simple registration process, which is for new clients. As well as allowing people to view their information online via the portal, this will also take them through a series of questions, including a risk questionnaire. ‘If anything in the risk profiling doesn’t sit right, the process stops and we’ll give them a call,’ says Power.

Beyond the opportunities mentioned above, FMB believes robo-advice has a role to play in reconnecting with dormant clients.

Ben Faulkner, communications director, EQ Investors: Simply EQ

EQ Investors has made a foray into the robo-advice market with its new service, Simply EQ. Presenting itself as a hybrid between telephone, face-to-face and robo-advice, Simply EQ provides a low cost and convenient option for those seeking an alternative to regular financial advice.

Clients are able to invest entirely online, but communications director Ben Faulkner says that most clients take the option for the phone-based service, which involves a fully qualified adviser at the other end of the line. ‘You could call it robo-advice, but it’s not strictly robo,’ says Faulkner. ‘It’s more about developing relationships between the client and adviser.’

While robo-advice is often put forward as the solution for the advice gap, Faulkner also notes that larger clients also utilise the service. From an investment perspective, the service includes conventional passive and active investments, as well as EQ’s positive impact portfolios.

Alan Moran, director, Interface Financial Planning

In Birmingham, Alan Moran is showing that robo advice isn’t just for the nationals. His new offering, also utilising Intelliflo’s Personal Finance Portal, provides clients with an affordable and automated route to advice.

Moran currently charges a 0.3% ongoing fee for the advice, with no initial charge. The director of Interface Financial Planning doesn’t expect the service to be a cash cow, but wants to test the waters and see what can be achieved as technology continues to reshape the profession.

‘I love technology; I embrace it at every opportunity,’ says Moran, who believes the proposition also boosts Interface’s internet presence. ‘For me, this is an obvious add on. I don’t see it as a big money spinner, and if it starts earning us £50 per month I’ll be happy for now.’

Austyn Smith, managing director, Austyn Smith Associates: Money Chef

Austyn Smith, managing director of Austyn Smith Associates, is hoping to lead his firm into the future through the newly created Money Chef service. Money Chef promotes passive investing, automated portfolio rebalancing, and an element of life planning.

‘We wanted to go in a different direction,’ explains Smith. ‘The traditional financial advice community is predominantly dealing with the 50-plus retirement market, and we wanted to do something different and go in the opposite direction, and do something with a bit more purpose.’

Smith’s target market is first-time savers, and generally speaking, people aged between 25-45. Accordingly, Smith says it’s aimed at ‘people looking to get on the savings ladder.’

Money Chef offers three levels of service, named ‘The Starter’, ‘The Classic’ and ‘The Signature’, which are available for monthly membership fees of £3, £6 and £9 respectively. The ongoing advice fee is 0.46% per annum across the board. ‘There’s a life planning element,’ adds Smith, who is keen for the service to have a personal touch, despite being automated. ‘We want to help people organise and simplify their lives.’

Keith Churchouse, Director, Chapters Financial: SaidSo

SaidSo, the brainchild of Keith Churchouse of Chapters Financial, provides a unique take on robo-advice. For £299, the direct to consumer service will provide a peronal report, including information on how to plan your finances for the future.

SaidSo offers a departure from robo-advice, per se, as the advice is provided by a team of professional advisers, and typically turned around within 10 working days. The client is required to complete an online form beforehand, detailing their finances as well as their ambitions for upcoming years.

‘We are effectively streamlining the service to keep it simpler for the client and to keep our delivery cost lower,’ says Churchouse. ‘Remote and robo-advice services are in their infancy but you need them in place to achieve a start for progress. Without them, you are resigning yourself to the past quite quickly.’

Comment & analysis

Twitter