Two out of five advisers fear their business could lose out to robo-advice propositions and three-quarters think regulation designed to control digital advice will impact them, new research shows.
But advisers increasingly accept that digital advice will help close the advice gap, with 69 per cent now believing technological-based solutions can help to close the advice gap, compared to just 17 per cent in a study conducted last year.
Advisers are concerned the expansion of robo-advice could mean potential future regulatory issues for their businesses while also failing to deliver the best outcomes for clients, the research from Prudential shows.
A survey of advisers found that 76 per cent are worried about possible long-term compliance and regulatory challenges while 67 per cent fear robo-advice solutions will not provide the best advice for clients.
When it comes to launching their own versions of robo-advice over the coming year, 41 per cent of advisers said they or their firm had plans to offer robo-advice solutions alongside traditional services. And 46 per cent agreed offering robo-advice will help their business grow by enabling them to help clients with smaller funds compared, with just 27 per cent disagreeing.
But 40 per cent of advisers are worried about their firms losing out to technological-based solutions and 54 per cent say robo is suitable only for clients with smaller funds.
Prudential business consultancy for advisers head Paul Harrison says: “There’s a growing acceptance that robo-advice has a role to play but advisers have real concerns about 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.”