The threat of ‘robo-advice’ to the financial landscape is set to intensify as government consults on plans to make it easier for high street banks and advisers to offer simpler services to consumers at an even cheaper costs.

However, with the current economic climate in a state of constant flux and consumers more unsure than ever about where to invest for the best returns, advisers have accused the Financial Conduct Authority of misleading the industry as to how relevant robo-advice will really be to clients.

Unique Wealth Management’s Andy Bennett commented the regulator was, to an extent, leading the industry up a “blind alley” when it comes to robo-advice as today more than ever clients want something that is real and relevant to them when it comes to financial advice.

“Predominantly out client base is over 50 and pre-retirement or at post-retirement and their main thing they are interested in is whatever is in the media. Brexit has been a big concern for them and clients are worried about where their returns are going to come from; interest rates having fallen again….They are having to look for alternatives [to generate income]. But at the same time they are unsure about the risks, and the risks associated with investing in anything other than traditional cash deposits.”

In particular, Bennett argues increasing regulatory changes, including changes to pension freedoms and the arrival of MiFID II, the economic climate is in constant flux and most advisers are finding clients need more reassurance and better face-to-face interaction than ever before, rather than relying on robo-advice which uses algorithms to offer guidance and pick out funds on a general basis.

“Most of our communication with clients is done face-to-face; they want our time and attention. It is important to see them on a regular basis and talk through issues that are pertinent to them to illustrate what we are doing and what our investment partners are doing on their behalf. Clients need advisers to hold their hands and talk them through key issues and how it is going to impact them. This is actually positive thing for financial advice and there has never been a bigger need for advisers today.”

This was written by editorial staff at Professional Adviser. All views are from the publication.