Robo Advice grows alongside Independent Financial Adviser clients.

Robo Advice grows alongside Independent Financial Adviser clients
Robo Advice grows alongside Independent Financial Adviser clients

Article by Phil

Robo Advice grows alongside Independent Financial Adviser clients.

According to Boring Money, the number of clients using robo advice has reached 20% which is 2 million out of the almost 10 million savers with DIY investment platforms. These now hold £360 billion in investments

Robo advice is the use of digital services to plan investment strategies. Without human Independent Financial Advice.

This particularly popular with younger investors. Especially Gen Z (aged between 18 and 25). Interestingly research showed that for these young people investing was common.

  • 49% said they had some form of investments
  • But 43% said their investments were in crypto
  • Half said they found their information on social media and
  • The majority said they were investing primarily to afford to buy a house.

Although individual investment holdings are seven times higher when an Independent Financial Adviser is involved. Clients are also generally happy with their advisers. Research by Oxford Risk (FT Adviser 30/5/23) showed that:

  • 86% of customers would recommend their financial adviser to family and friends
  • 87% said that their Independent Financial Advisor had helped them to meet their financial objectives
  • 81% said their adviser understood their needs, and
  • 78% said that their adviser helped to prevent financial harm

All of which points to a positive future for advisers and their clients.

Especially as investments continue to grow. In April over £9 billion was invested into ISA’s. On top of this £5.2 billion was invested into banks and building society accounts. Plus £3.7 billion into fixed terms savings products. A total of £18 billion in money coming in. Although over £10 billion was withdrawn from other savings accounts.

It seems that this might be part of the indication that people have, or at least expect to have more money. More research by Hargreaves Lansdown (FT Adviser 15/6/23) found that:

  • 25% of people surveyed expected that they would become millionaires at some point
  • 10% expect this to happen before they are 50
  • Of all the wealth in the UK 40% is held in pensions and 35% in property values

You might think this research seems unrealistic. But the average savings of retired couples in the UK at the moment is almost £500,000. With high levels of inflation, the million figure could be achievable in the near future.

But despite these expectations, people are still worried about handling or even talking about their finances.

Research carried out by Schroders found that:

  • 25% of adults surveyed had no idea about their parents’ finances
  • 33% didn’t know whether their parents had a Will or who the executors were
  • Over 50% were worried about making a mistake when looking after their finances

Happily, savers considering cryptocurrency as an investment are also in line for some protection. The FCA has just announced that sales of cryptocurrency will be subject to a 24-hour cooling off period from October. Although the exact date is still to be confirmed. Crypto firms will not be able to contact investors during that short period and customers will then need to confirm that they still want to proceed. This offers at least a period for reflection, although some might argue that 7 days would be more helpful.

This still offers no protection for cryptocurrency investors. Although the FCA has been tasked by the government with regulating the industry. The FCA’s position continues to be that crypto is high risk and investors should be prepared to lose all their money when they invest.

Five million people currently hold cryptocurrency in the UK which is roughly 10% of the population.

All prepared to take maximum investment risk searching for claims of double-digit returns, or better.

Robo Advice grows alongside Independent Financial Adviser clients
Independent Financial Adviser in Burnley Nelson Colne Barnoldswick Clitheroe and Lancashire area

 

 

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