Business Health has sent a potentially important message to advisers about how they can maintain their relevance and compete against the emerging reality of ‘virtual’ financial advice.
In its August newsletter, the firm has alerted Australian advisers to new offers in the US market, where it also consults, that automate financial advice and deliver it within an online environment.
Termed the ‘Robo Adviser’ by US media, this emerging service seeks to differentiate itself and add value to prospective customers by automating the traditional advice process and delivering an equivalent outcome for a fraction of the price.
…this emerging service seeks to differentiate itself and add value to prospective customers by automating the traditional advice process
Business Health cites two such services, with the catchy names of ‘Wealthfront‘ and ‘Betterment‘, both of which seek to deliver ground-breaking, virtual financial advice.
Assessing these offers, Business Health has determined these services offer a complete automation of the financial advice process, including:
- Initial marketing
- DIY calculators
- Risk profiling
- Fully compliant SOA/plan preparation
- Implementation of the recommendations
- Ongoing monitoring
The emergence of these virtual advice offers brings into sharp focus the question of how financial advisers deliver value. To assist in clarifying how ‘real’ advisers can continue to differentiate their value proposition in an ever-changing world, Business Health has documented its five tips to competing with ‘Robo Adviser’:
- Don’t compete on price, but rather the value you deliver
- Communicate proactively, meaningfully, frequently and personally
- Review your Client Value Proposition in the light of the ‘new world’
- Continually reinforce your CVP with clients, staff and centres of influence – be able to confidently and clearly articulate why spending more with you represents far greater value
- Ensure you’re taking full advantage of the opportunities technology offers
Business Health cautions advisers on this final point by stressing that use of technology within an advice business requires both expertise and commitment.
Advisers can click here to access Business Health’s August newsletter, which contains more observations about ‘Robo Adviser’ and other current industry issues…
