Jason Butler has urged advisers to concentrate their services on both life and financial planning rather than portfolio management because of the threat posed by robo-advisers.
Addressing the Personal Finance Society (PFS) Financial Planning Symposium in London, the Bloomsbury Wealth founder warned advisers they needed to be worried about robo-advisers because their propositions would make customers expect more digital interaction and so "hasten the commoditisation of portfolio management".
To combat this, Butler (pictured), now a financial commentator and speaker, told advisers to concentrate their skills on the "Cinderella" of financial services which, he said, was financial organisation, rather than giving the service for free alongside portfolio management. He encouraged advisers to separate portfolio management from financial planning.
"Life planning and financial planning - you can't have one without the other," he said. "Life planning is what's important to me - how do I make decisions? What are my biases? Get and keep me financially organised.
'Working and spending decisions'
"This sort of service is often given away for free as people tend not to realise how valuable it is for clients. This is not about saving and investing decisions anymore -please stop talking like that. It is about working and spending decisions."
Although Butler warned advisers of robo-advisers' ability to interrupt the advice sector, he added: "Very few of them will survive in their current from over the next five to 10 years." Their problem, he explained, was that they would struggle to attain customers and make money.
He added: "I've got some bad news. Most clients can't have it all - they've got to make compromises. They've got to make trade-offs - course corrections. If you spend more than you earn, you're going to get poor. For real advisers, this is where all the 'sex and drugs' is. This is brilliant.
"The robos aren't selling this, they're selling a commoditised investment service, which is not advice, which is not planning, which is not relationship-driven because they just want to make a few quid and then sell their business."
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