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Do you prefer man or machine when it comes to your money?

22 May 2019

This article first appeared in Money Observer.

I was recently asked to take part in some radio interviews about the growing role of technology in financial services.

My response was that while technology can and should make our industry more productive, and therefore accessible to more people, it can’t and won’t do everything.

Take the advent of robo-advice. At Octopus, we recently commissioned some research to learn more about investors’ attitudes to this technology.

Rating robo-advice

Our research found that 69% of retired people say that they would never consider robo-advice, compared with 32% of non-retired people.

Now, that may not appear too surprising. Older generations have spent half their working lives or more without much of the technology that exists today. They didn’t need it then, and they aren’t necessarily in a hurry to use it now.

However, when we asked people why they wouldn’t consider robo-advice, only 14% of retirees said that it was because robo-advice is difficult to understand. That compares with 15% of non-retired people. 

The number one reason, among both retirees and non-retirees, is that people would simply prefer to speak to someone about their finances.

There’s a slight misconception that financial advice is all about numbers and calculations – it isn’t. It’s about understanding people’s life goals, and then helping them to manage their finances in line with those.

There is scepticism across all age groups about how a machine can do that. When it comes to their life’s savings, most people want the comfort of knowing that a professional has taken the time to listen and understand what’s important for them. That’s a job for a human being.

There’s another reason why it makes sense for older generations to be warier. Their financial decisions tend to be a lot more impactful. If you get decumulation wrong, there isn’t time to earn the money back.

Where does tech fit in?

When we asked people why they would consider robo-advice, the most popular reasons across all age groups were ease of use, lower costs and the flexibility to use it when and where they wanted.

Technology’s role in financial advice will be to lower costs and to make it easier for people to access services. One change that I expect to see is increasing use of technology as part of customer interaction.

So where an adviser might previously have gathered information from a client in a meeting, and then processed it back at the office, clients will find it increasingly normal to input much of that data themselves, much as they do when shopping online or booking a holiday. This is just one example of how tech should help advice firms reduce costs for their clients.

Technology will also continue to make it easier for people to access information about their finances, and in a way that suits them. Some people like charts, others prefer tables of numbers. Some prefer to read a document, others to hear someone explain information through a video.

None of this replaces a flesh-and-blood adviser. What it does is free them up to spend more time on other activities. Used in the right way, technology should enable advisers to serve many more clients than they currently do, including those who at present can’t afford professional financial advice.

So don’t fear the rise of the machines – make them work for you.


For journalists in their professional capacity only. Personal opinions may change and should not be seen as advice or a recommendation. We do not offer investment or tax advice. Issued by Octopus Investments, which is authorised and regulated by the Financial Conduct Authority. Registered office: 33 Holborn, London, EC1N 2HT. Registered in England and Wales No. 03942880. Issued: May 2019.