Can robo fill the gap?



In these days of fractured wealth sector business models, amid the green shoots of ethical, quality financial advice in Australia, does digital advice automation hold the key to a sustainable future built on serving the unmet needs of more advice consumers?

Can the ‘fin-bots’ or ‘robos’ or ‘goals based digital providers’ build on the momentum provided by real humans doing good work and service the roughly four in five Australians who don’t currently have an advice relationship?

The question of high tech augmenting high touch in financial advice has been a question of ‘when, not if’ over many years. Just who will be the first to meaningfully crack the robo code in Australia remains to be seen.

The various digital offerings (which I will call for simplicity reasons robos) bring huge promise to what is an incredibly complex, capital hungry and demanding challenge – the democratisation of quality financial advice in an environment of heightened regulation and soaring community expectations.

Despite seemingly impregnable challenges, new developments in the digital space around automated advice models are genuinely exciting.

Yes, a number of market entrants have paused to take stock in the post-Hayne environment, reassess and re-purpose their market position. But that has not stopped them. It is this prospect of new technology making an enduring social and commercial impact that is an enthralling advice market dynamic.

The great prize for the right offer at the right time is the mantle of becoming to financial advice in Australia what Uber is to share ride transport or Netflix is to on-demand content streaming. Observing which brand or brands will germinate and dominate in Australia is one of the few new points of excitement in the advice sector.

The likelihood of this dominant player emerging in the next five years is quite real. But, like any brand seeking a clear social and commercial license to operate, the robos must also negotiate a few older school reputation obstacles in order to gain cut-through.

Financial tech aspirants hoping to ease their robo offerings into the mass advice market in Australia have a huge opportunity, yes. However as always, there remain challenges.

One core challenge is consistently proving that machine learning can out-punch a human being in the key areas of empathy, processing complex information and providing ethical, compliant and tailored financial advice.

Beyond the operational or technology aspects is the market acceptance challenge. Let’s hope the digital brands both local and offshore who are now lining up or ramping up their offerings to fill the market gap go an extra mile. The ‘extra mile’ in my view is to carve out a new paradigm. Identify a strong and clear higher purpose and communicate that often. The good that you do or propose to do should lead the messages you deliver. An automated Statement of Advice might be a thing of wonder to the code writers who created it but means very little to the end customer who just wants to gain a sense of the value and enrichment you bring to their world.

Think here about the higher purpose vision of tech giant Microsoft – it sets out to ‘empower every person and every organisation on the planet to achieve more.’ Great stuff.

Be worthy as not just high tech, data rich and reliable. Be worthy as also high touch – the know your client rule is more important than ever. Fashioning a friendly, professional and savvy discourse with the end client is absolutely critical.

This should also be backed by repeatable evidence of your ethics. The recent issues with Facebook, Cambridge Analytica and the appropriate use of personal data adds a layer of additional obligation to the robos to bulk up their governance and data security. Add to that clarity regarding the intent of your innovation, leadership, the promise of your service standards and financial strength, combined with your knowledge of the technical regulatory environment in Australia will deliver your best chance of success and ultimately winning the mantle of Australia’s best robo.


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