Robo-advice is something brokers tend to be fearful of, or dismissive about. Is it about to take their jobs and steal their clients? Or is it just a storm in a teacup? It is more likely somewhere in the middle. A tech option for mortgage advice was always going to happen but it is not going to take over the world.
Limits of technology
What robo-advice is missing is the human element; someone to answer a question and put their mind at rest. For this reason many robo-advisers have started to team up with existing brokers or employ their own staff.
It is the same with online estate agencies. There is no doubt that Purple Bricks, in particular, is having notable success, but it is not even close to the high street presence, as there are more people that still want to go into a branch and speak to someone.
That said, it is a foolish man who dismisses robo-advice in the round. The broker needs to work with technology rather than against it. In fact, both sides need to work more closely together.
The unique selling point is ‘advice’ takes
minutes rather than hours
Appointed representatives usually have to do what their network tells them, so it could well be the directly authorised that drive this market. This is where mortgage clubs could really add some value.
Robos’ unique selling point is that ‘advice’ takes minutes rather than hours. Any broker that can reduce the time it takes to advise on and search for a mortgage is in a better position to fight back.
It is unlikely that significant time savings will be made from one sweeping move. Rather, it will be incremental. Providing brokers with quick ways of doing things they are doing manually at the moment will be key – criteria search being a prime example, as well as access to all lender calculators or smart online application forms.
Robo-advisers will continue to press forward, so the broker community needs to do so too. Embracing technology will bring both sides far closer together.
Nicola Firth is chief executive of Knowledge Bank