Roboadvice could divert clients: Naylor
Michael Naylor, a senior lecturer in Massey University’s school of finance, has released a new book on the future of the insurance industry.
In it, he tackles the question of roboadvice more generally. He said it was not a fad but the future of financial advice – and the rapid development of artificial intelligence would help it to become more sophisticated, down to “talking head” avatar software programmes dealing with customers face-to-face.
He said financial and wealth advisers are currently under-estimating the potential impact of artificial intelligence (AI) systems. “Very few comprehend he ability of future AI systems to offer competent generic advice to 90% of investors. This is because they are evaluating the current state of roboadvice software rather than the rapid exponential pace of future developments,” he said.
He said the combined AUM of US roboadvisers is currently less than US$20 billion and no roboadviser had individually hit the level required for sustainable profitability.
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