I was asked by a journalist today to comment on mortgage ‘roboadvice’ which could source a product in 10 minutes with no fee:
There is no doubt that there is an advice gap and a need for greater availability, including for mortgages. Inevitably technology will be used as one means of filling that gap. For simple clean cases I would hope that the algorithms used would be sophisticated enough to source a good final product for the clients and I do wish the ‘roboadvisers’ well in this endeavour.
As with all financial advice the risk to the client is where peripheral detail is relevant but unknown by the machine. A quality financial adviser will ascertain in minute detail, the clients’ full situation, including attitudinal non-financial facts. The adviser will elicit detailed future aspirations over the short, medium and long terms: both financial and personal. If there are any existing savings or debts, the adviser will help the client to assess how best to relate them to a mortgage or not. We have had mortgage enquiries where we have established the client does not need one! Or where the client should in fact borrow more. We helped one client retire and clear their mortgage there and then, even though she was applying to remortgage. And of course a human adviser will be able to identify other need areas based on skilful questioning, be it planning for children, retirement, education costs, death, inheritance and the rest. Areas where the client simply had no idea improvements could be made.
Machines will certainly have a role to fulfil filling a gap, but they will always be a poor second best to quality human advice. It only takes 10 minutes and ‘no fee’ to make a terrible life changing mistake!
12 September 2016
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