Robo-advice and the missing human element

Technology is changing the consumer world and the financial sector is not only not immune

Technology is changing the consumer world and the financial sector is not only not immune to this development, but in many ways is at the forefront of developments.

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In terms of mortgages Robo-advisers are stalking the corridors of finance, and brokers are worried that they are stealing their jobs and threatening their positions. But do customers want the human touch when it comes to the most important financial decision of their lives? Certainly in other retail sectors technology is replacing the face-to-face contact of the High Street shops, so why should financial shopping be any different?

Advances

Well there may be a few reasons why not, but unquestionably the advances in Fintech over the past few years are impacting all aspects of advice, and mortgages as a product are no different, apart from the individual impact on finances.

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Financial adviser software of the sort provided by https://www.intelliflo.com/ is an example of how the industry is changing and in some cases of how brokers and robo providers are teaming up together.

The advantage of robo advice is that it takes minutes, but are consumers happy to accept that in place of a human touch that may feel more reassuring when a life-changing decision is being made? The question is, can brokers use technology to reduce the time they spend with clients and still provide them with the correct option? Success in this area will keep brokers ahead of the game.

The Financial Conduct Authority published its Sector Views 2018 earlier this year and said they expected more firms to respond to changes in the socio-economic environment by developing products in the short to medium

Protection

One aspect that consumers need to be concerned about is protection. Mortgage advisers will try to ensure that their customers understand the need to have cover in place should they become unable to pay their mortgage and understand the debt they are taking on. Figures suggest that almost half of UK mortgage holders do not have the correct protection in place and industry experts have expressed concern that the growth of Robo advisers will increase this number.

What is clear is that it is impossible to turn the tide of innovation, but a balance will surely be reached between brokers and robo advisers.