General Manager - Wealth & Advice, Australia
11 November 2020
5 min read
While robo advice has been around for some time, it has experienced a rather slow adoption by the superannuation industry. Recently, however, the world has been swiftly propelled into the digital realm—so the time is now for super funds to take today's technology and apply it to the next evolution of digital member engagement.
We get plenty of questions from clients about robo advice —including what it is and how it fits into the advice model. You’d only have to ask 10 people, and you’ll probably hear 10 different answers—including the perception that ‘Robby the Robot’ is punching out some numbers using a complex algorithm that many people don’t really understand. Then there’s the notion that robo advice is just a model portfolio recommendation telling people how to invest their hard-earned superannuation dollars. In reality, however, these are the outcomes of robo advice software, not the core essence of it.
When looking at robo advice software, it’s important to understand the key elements that will deliver the success metrics you desire—good robo advice software is:
Member engagement is one of the core challenges super funds are trying to solve. For years, we’ve seen a widespread, almost cultural, apathy towards our superannuation. Often our account just sits there, our money is invested on our behalf, and truthfully, we’re not exactly sure where it’s being invested. Then we receive a statement at the end of each financial year that—let’s be honest—not many of us read. And therein lies the perpetual challenge of superannuation member engagement.
With the myriad of robo advice software options available today, the opportunity for increased member engagement is ripe for the picking. The question is: Where to begin?
Software with a user-friendly design is definitely a start, but it’s not enough. The foundation of successful robo software lies in its tools. They should help members understand super, their personal financial situation, and how that translates when it comes to their retirement. Once the notion of superannuation is demystified and—dare we say—perhaps even of interest to members, then there’s a greater chance of members engaging with their super for more than three minutes once a year.
Robo advice software need not always be transactional, or even outcome-driven. Educating members is equally as important. In fact, it’s a vital component of an end-to-end online robo advice journey.
Members need to understand their current financial position, the importance of being engaged with their super, and why making considered decisions are paramount in influencing their future financial health. Robo advice, with its data-driven accuracy, reliability and 24/7 availability, can build member confidence and encourage members to act on the advice it provides.
Demonstrating value is the key to repeat use of robo advice software. If you can prove that your member portal—and its tools—make a positive difference to a member’s financial circumstance,, they’ll be more likely to return and engage with it on a regular basis. It’s for this reason that robo advice software needs to be intuitive, engaging and educational—easily allowing the member to see how their finances are tracking over time. Repeat visits build engagement, add value, and take the member on a journey—rather than just delivering a point-in-time transaction or a one-off outcome.
When it comes to robo advice, knowing where to start can be a bit of a minefield. Starting small is absolutely OK, in fact, it's often better than biting off more than you can chew. Starting small can actually be the catalyst for building a broader and more comprehensive online advice offering—one that complements a trusted relationship with a financial adviser.
With the right foundations, and using the power of analytics that robo advice software can provide, you can build valuable online journeys and experiences for your members—helping them prepare for a better financial future.
Robo advice can be a stand-alone offering, however, for more complex advice requirements, it works equally as well when paired with advice provided by an adviser. It’s often used to triage the advice process and clarify the member's financial position. Therefore, if and when a meeting with an adviser is required, they will be well equipped with the right information to provide efficient and accurate advice.
While robo advice isn’t necessarily a panacea—it is a key component to your overall member support and advice services. With today’s industry rightfully touting member services as the foundation of a trusted brand—isn’t it better to get all of your digital-advice ducks in a row now?
Learn more about our Robo Advice software here.