Many Kiwis ready to embrace 'Money Robots', Kiwi Wealth report says
Kiwis are open to the idea of a robo-adviser helping them manage their finances, but still want real people available to help them with some decisions, research by KiwiSaver provider Kiwi Wealth shows.
The Rise of the Money Robots: Kiwis' attitudes to roboadvice report has been released to coincide with New Zealand's first ever "fintech" conference being held today in Auckland.
It found most people hadn't even heard of roboadvice, but once it was explained to them, one in five said they would embrace it.
Roboadvice is the term used for advice given not by a human, but online by automated services driven by clever algorithms.
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Many believe roboadvice could be the answer to improving New Zealanders' retirement planning, especially around KiwiSaver.
Few people seek financial advice, and roboadvisors could play a role in providing it easily and cheaply, once New Zealand laws have been changed to legalise roboadvice. Currently financial advice can only be given by a person, not a well-programmed machine.
The research involved surveying 1001 people on their attitudes toward the use of roboadvice.
Only 8 per cent had heard of it, and many appeared not to be ready to take financial advice from machines, even those programmed by companies they know, like banks.
But while 20 per cent of people said they would embrace roboadvice, almost half said they would prefer a human financial adviser over a roboadviser.
"The survey findings clearly show that Kiwis see roboadvice as complementary to human financial advisers, rather than as a total replacement of experts," said Joe Bishop from Kiwi Wealth.
"That reflects how new roboadvice is as a concept, and the lack of a proven track record for the technology here. However, that's changing, and we expect things to only accelerate."
Roboadvice would make financial advice available to more New Zealanders, he said.
"There are 2.6 million of us enrolled in KiwiSaver but only around 1800 authorised financial advisers available to provide personalised advice," he said.
"The long-term well-being of the country requires us to manage our retirement investments well. New technology will make it easier for Kiwis to get the financial advice they need."
Kiwi Wealth's Ramesh Naran, who is speaking at the FinnoTec conference today, said: "The primary focus of roboadvice is to make advice available to everybody."
In the US, it had been taken mainstream by online roboadvice business Blooom, which helped Americans make decisions around their 401K schemes, which are the US equivalents of KiwiSaver accounts.
Roboadvice had the potential to change the way people saw financial products like KiwiSaver, and increase people's engagement with them, Naran said.
It could even prompt Kiwis to save more.
"We would become more knowledgeable and able to make more informed decisions," he said.
That could see people increasing their KiwiSaver contribution rates, and decreasing their discretionary spending.
But roboadvice would not bring about the demise of the human adviser, Naran said.
"My view is we are definitely not going to see the death of human advice with the arrival of roboadvice," he said.