Banks and robo-advice will never replace the role of advisers, despite them increasingly moving into the advisory space, says Old Mutual Wealth customer director Carlton Hood.
His comment come after HSBC recently revealed it was entering the retirement advice market, and earlier this week Santander said it was considering re-entering the advice space.
Speaking at the Platforum conference in London today, Hood said while banks and robo-advice offerings are a way to help close the advice gap in the market, advisers shouldn’t see them as a threat.
“If we look at the advice gap I think that is going to be closed anyway by some direct robo-advisors and possibly also by banks, but I don’t think banks will be ever be able to, or want to, provide the level of service support that an adviser can give. I don’t think they’ll ever replace the role of advisers,” he adds.
However, Wealth Horizon chief executive Chris Williams, also speaking at the conference, says banks have “got a lot on their side” to succeed in the advice space.
He says: ”Banks have got two ingredients to make them successful in this marketplace. They’ve got an active and captive client base as well as a brand and trust, which will become more important to financial services.”
Bank customers still trust banks despite the bad reputation and track record they gained in recent times, Williams adds.
He says: ”The question is will they listen to their customers sufficiently in terms of what they actually want and need and design products for their clients, rather than for the benefits of their shareholders.”