Afiniation co-founder Ian Dunbar said that at present there are roughly three or four live robo-advice players that are providing services to clients; however, by 2016 this number is set to be around 15.
“What we’re going to see, certainly if we look out over five years and even in the next 12 to 24 months, [is] a lot more development around tools that enable more comprehensive advice,” he said.
Mr Dunbar said a “hybrid-robo-human-adviser” will also develop, explaining that this can be defined as an adviser who heavily integrates technology into their offering.
This will have significant benefits, according to Mr Dunbar, namely in terms of the scalability and efficiency of delivering financial advice.
Further, Mr Dunbar noted that the adoption of robo-advice solutions by large institutions like Macquarie and NAB will normalise the sector.
“The major players are going to start to turn the robo-advice segment into the mainstream proposition in Australia,” he said.
The robo-advice firms that will become successful within the Australian funds management space are the tools that integrate a human adviser into their offering.
Mr Dunbar said that when looking at the US robo market, the successful firms are the ones linking back to a human adviser.
“By combining lots of technology but still [having] access to the human adviser, you’re both capturing all of the efficiencies and scalability that technology delivers […] but you’re retaining the relationship.”
He added: “The market is going to have some purely technology tools, a piece in the middle which [will be] a combination of technology and humans, and then of course you’re going to have high-touch advice at the other end.”