Aviva UK chief executive Andy Briggs seems to think so. Many of the country are missing out when it comes to getting sound financial advice as they simply cannot afford it. However, that could all be about to change if robo-advisors are to come out to play.
With artificial intelligence (AI) based robo-advisors firms wouldn’t have to spend huge amounts of money paying qualified advisors to review a person’s affairs. The AI would carry out this task much quicker and more accurate than a human anyway.
When speaking to the Press Association, Briggs said that Aviva UK “were big supporters of the Retail Distribution Review, but one of the consequences is that advice is fee-based and highly professionalized.”
The problem is that it’s only those high earners that are able to afford those fees. Therefore people are being forced into making financial decisions without the proper guidance or support they need.
“The challenge in the UK regime is that as soon as you step over that line into advice – if you are asking about your small pension pot, for example – then you have to move into full-fat advice, where you have to do a very holistic review of all that person’s financial affairs and give the full advice, with the full fee and cost, and with the fully qualified advisor to do it,” said Briggs.
Last October Aviva announced its intentions to snap up a majority share of the UK online investment service, Wealthify. This Cardiff-based firm aims to make investing more available and more affordable to a wider range of people. With Wealthify, investors can start saving from as little as £1.
Mark Wilson is Aviva’s group chief executive and it’s been noted that he’s been on the lookout for decent AI acquisitions for a while now and he starts down the path to try and turn Aviva into a fintech company.
“The other area that merits some exploration is ‘could you have advice that is just focused on a subset?’ Advice that is just on someone’s pension pot without trying to take into account other assets they have elsewhere,” said Briggs. “At the moment you can be holistic or nothing and there is a big gap in the middle.”
Future targets for Aviva include a higher rate of growth in annual earnings than the usual 5% as well as increasing its dividend payout ratio target to around 55% – 60% within the next couple of years.
First reported Independent