The majority of advisers are worried that the rise in robo-advice will put them under greater regulatory scrutiny, research from Prudential has found.
More than three-quarters (76%) of those questioned for Prudential’s 2017 Adviser Barometer are worried about possible long-term compliance challenges.
The report also uncovered concerns over the quality of robo-advice with two out of three advisers (67%) believing that such an innovation will not offer clients the best outcomes.
Attitudes are changing. Of those questioned, 69% now believe technological-based service can be beneficial. This is a marked rise on the 17% that believed this when surveyed for last year’s study.
Many are planning to launch their own robo-advice system with 41% working on such a strategy to run parallel with their traditional services.
Other highlights include 40% of respondents believing that robo-advice is a threat to their business, while more than half (54%) see it as only being suitable for clients with smaller funds.
Prudential’s head of business consultancy, Paul Harrison, said there is a growing acceptance that robo-advice has a role to play, but advisers are concerned at the potential regulatory impact it will have.
“Many advisers remain sceptical about the risks and rewards of robo-advice, although improved technology can bring greater efficiency, reduce costs and help advisers to serve clients better while continuing to run viable businesses.
“However, views are changing rapidly as technology expands. Advisers will need to adapt to prove the ongoing value of bespoke advice and benefit from the opportunities technology offers.”
