Adviser Innovation logo
Advisor Inovation logo
Robo-advice firms under pressure to source clients

Robo-advice firms under pressure to source clients

author image
By tlewis ·
November 12 2015

Robo-advice firms under pressure to source clients

While robo-advice is commonly seen as a disruptor within the traditional advice space, one expert has warned that it still faces challenges in terms of finding and engaging with clients.

Jeremy Kwong-Law, chief executive of automated advice solution BetterWealth, said automated advice providers face difficulties when it comes to sourcing clients.

"From the perspective of a robo-advice company, the challenge is always going to be distribution and [the ability] to fund marketing."

He argued that any great disruptive business succeeds on having a clear path to customer acquisition.

"I think [businesses] will need to find different ways to get to customers if they're going to win," he added.

"The winner in the space is probably the one that can figure that out."

Mr Kwong-Law - who is still in the process of building out BetterWealth's ETF-focused robo-advice tool - indicated that another challenge faced by the automation sector is how to engage with advisers and convey to them the value of incorporating a robo-advice capability into their business.


According to Mr Kwong-Law, robo-advice complements advisers as it can serve a segment of the market that is unattractive to them.

"If anything, robo-advice is going to help advisers. We're going to [serve] customers that advisers can't currently serve," he said.

Mr Kwong-Law said for low-balance clients that are "uneconomic" for advisers to serve, robo-advice can provide guidance on creating a low-cost ETF portfolio.

"We are exploring ways to help the adviser maintain a relationship with low-balance clients so that they can engage in more strategic advice when the clients' balance grows to a meaningful level," he explained.

"We can be that one really easy part in a much quicker and cost-effective way [of providing advice]."

Unable to extract YouTube ID from URL
Forward this article to a friend. Follow us on Linkedin. Join us on Facebook.
Find us on Twitter for the latest updates

Subscribe to our Newsletter

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

latest articles