Kiwi Wealth has become the first financial services provider to receive robo-advice approval from the FMA and its GM Customer, Product and Innovation, Joe Bishop, says robo-advice will stimulate the need for advice and bring more business to human advisers.
“I think you’ll find a lot of New Zealand is under advised at the moment,” Bishop explained. “A lot of people don’t know to ask for advice and even if they felt that they needed advice, they wouldn’t know where to go.
“I think what you’ll find with robo-advice is it will open up advice to a whole new category of people who have never taken advice before…”.
But they will likely only go so far and then feel the need to actually speak with a real person, Bishop told RiskinfoNZ.
“So I feel that it actually will increase the need for human advisers over the medium term.”
Bishop said robo-advice is an opportunity that advisers should welcome for two reasons:
- Its potential to generate new clients for advisers
- Its ability to cover pre-work before an adviser-client conversation, cutting transactional work from their day and freeing time for advisers to focus on value-add pieces
“I think robo-advice has the opportunity to free the advisers up to do what they do best”
“So I think robo-advice has the opportunity to free the advisers up to do what they do best,” said Bishop.
The wealth and investment management company spent the past three years developing its advice platform for its Kiwi Wealth KiwiSaver members.
“I absolutely believe that there is a path for risk products within robo-advice,” he said, adding, “What it requires is advisers to recognise and embrace this, so not to see it as a challenge, not to see it as a threat but to see it as an opportunity.”
Bishop said their current robo-advice functionality set to roll out in June is very product-centric around Kiwisaver, to help their members reach their retirement income goals.
“So we built functionality to provide them with a projection and help them define a goal and what we’re looking to do is help them close that gap between the two,” he said.
But Bishop said Kiwi Wealth’s robo-advice capabilities are set to extend over the next 18 months to become a fully comprehensive holistic retirement income solution, allowing members the option to import information about other assets such as property, shares and term deposits.
Following that, he said they intend to make it possible for the robo-advice functionality to apply to non-retirement income goals too, such as investing for school fees/education, retiring early or being unable to work temporarily and having enough savings to cover expenses.
Robo-advice has definitely arrived, said Bishop and will reinvent the way Kiwis manage their finances.