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Surprise opportunity for advisers to attract wealthier clients using robo-advice

The Embark Investor Confidence Barometer has revealed that robo-advice could open a new – and unexpected – revenue stream for advisers. Often touted as a solution to the UK advice gap by enticing less-wealthy investors, the results suggest that robo-advice also offers a gateway to advice for affluent investors. In fact, the more assets an investor has, the greater their comfort with robo-advice, according to the latest Barometer.

The Confidence Barometer is a twice yearly survey of 1000 people* conducted by Censuswide for the Embark Group (Embark), a leading UK retirement solutions provider. It found that almost half (38%) of advised investors surveyed with investable assets of over £500K said they expected a hybrid model (robo-advice with human advice on request) would be most suitable for them in the future. Overall, 35% of investors with more than £500K hold the same opinion. And, this view increases by the amount of assets held.

The Barometer found that advisers are set to embrace the technology. Only a fifth (20%) didn’t see robo-advice as part of their proposition inside the next decade, with 10% of advisers surveyed stating that their firms already offered robo-advice. However, advisers were split on whether they would partner with a provider (38%) or build their own capability (38%).

While advisers are confident in their own robo-advice plans, they appear less sure about its broader adoption by their peers. Almost half of advisers surveyed (43%) said they expect today’s model – where regulated financial advice exists largely as a distinct offering from robo-advice – to continue to be the most prevalent in the future. A similar proportion (44%) anticipate a hybrid model of digital portfolio management alongside human advice will be the most common.

Despite advisers’ desire to offer robo-advice, the findings made it clear that there will always be a place for the human financial adviser, even as technological integration continues to evolve. 57% of advised investors surveyed thought that bespoke financial advice delivered by humans would continue to be most suitable for them in the future, while an additional 30% felt a hybrid approach would work best. Commenting on these results, Toby Larkman, Chief Commercial Officer, Embark Platform, said:

“It’s little surprise that 80% of advisers are planning on offering a robo solution – they’ve been on the receiving end of a message telling them they should do so for years. I would argue most are doing it to open the doors to less wealthy clients (who may grow into more traditional clients in the future) and to reduce overhead costs of dealing with simpler client requirements.

“However, there is an interesting implication that offering robo-advice opens the door to affluent investors who do not currently access advice. This represents a huge opportunity for firms and may be another compelling reason to consider adding robo-advice. Typically, wealthier clients are more engaged in the protection and growth of their wealth so, if they remain at the forefront of the market as it evolves, we should expect them to show a stronger interest in new advice styles as they emerge.

“The market is going to fundamentally change, but it will be slow, and each firm needs to choose how it is going to evolve alongside it.”


Barometer survey details

* The Embark Investor Confidence Barometer surveyed the following groups:

  • 250 advised consumers (those that have a financial adviser) with a minimum of £100k investible assets, who have a pension and are aged 35-70
  • 503 non-advised consumers (those that do not have a financial adviser), with a minimum of £100k investible assets, who have a pension and are aged 35-70
  • 251 (18+) financial advisers who have clients, whose company/firm has assets of less than £500 million

The survey was conducted by CensusWide: htttps://censuswide.com

To access the full Embark Investor Confidence Barometer, go to: https://embarkgroup.co.uk/embark-investor-confidence-barometer-3/


Editors’ notes

For further information, please contact:

Quintin Keanie

The Agency Partnership (Embark Media Relations)

Email: quintin.keanie@theagencypartnership.com

Tel: 07880 602902


About Embark Group

Embark Group is a fast growing, diversified, financial services business and one of the leading retirement solutions providers in the UK. The Group trades under the brands Embark, Advance, Horizon, Stocktrade, Vested and The Adviser Centre and operates a wide portfolio of white label services to the Wealth Management, D2C, Robo-Advice, Retail Banking and Workplace markets.

Providing a combination of deep pension expertise and leading technology integration that cover the areas of Investment Platform, Brokerage, SIPP, Multi-Asset Funds, Fund Research and Employee Benefit Consulting, Embark works closely with financial advisers and its intermediary distribution partners to deliver their retail savings and investment propositions to consumers of all levels of affluence.

The Group has more than £37bn in assets under administration on behalf of c354,000 consumer clients, operating across seven UK locations (London, Bolton, Dundee, Edinburgh, Leeds, Leicester and Swindon). Embark has been recognised as one of the most innovative Wealth Tech companies for the past three years.

In January 2022 Embark became part of Lloyds Banking Group, a leading UK based financial services group providing a wide range of banking and financial services.

www.embarkgroup.co.uk

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