South Africans are amenable to using automated financial advice and are prepared to pay for it. This is one of the conclusions of Deloitte’s Automation of Financial Advice report.
The main objective of the report was to assess the appetite for and attitude towards automated financial advice for various scenarios ranging from saving, investing, retirement planning and buying life insurance, and the type of challenges providers of automated advice may face.
The results are the outcome of numerous discussions with key established players and start-ups in the banking, insurance, wealth and investment management markets, as well as by a Deloitte survey of close to 700 South African consumers.
Some of the insights include:
- The vast majority (more than 90%) of the consumers wanted advice – professional or informal – prior to purchasing a financial product.
- 86% of consumers showed willingness to use automated advice for simple financial planning, whilst 73% said they will use automated advice to convert R2.5 million pension savings
- 49% indicated that they would use free automated advice to find out how to minimise their bills
- A low percentage of consumers showed willingness to accept financial advice from non-FSPs
An interesting fact is that while acceptance of digital tools has increased, fully automated advice still faces certain limitations and is usually only used for single goal or simplistic investments. Given the novelty of fully automated advice, market players have observed that most clients still require a human ‘nudge’ such as a phone call or webchat with an adviser to complete an investment decision online.
Click here to download Deloitte’s Automation of financial advice report.