Are you willing to turn to ‘robo-advice’?
So, you’re wondering – what is ‘robo-advice’? There is a growing market in the UK of online offerings where, instead of going for a consultation with a financial adviser, you use a questionnaire devised by the provider which, depending on your responses, advises you where best to put your cash. Investors are placed in a broad investment strategy that, in theory, suits their objectives and attitude to risk. These strategies largely consist of passive investments which ‘track’ an index.
The move has come about in response to the retail distribution review which ruled on how advisers were paid and, in essence, meant they had to charge an up-front fee. This led to many advisers devising a minimum sum they would accept for a consultation. Clearly someone with a modest pot of money might feel that the charge was too great and therefore miss out on the opportunity to receive professional advice.