Growing your business with 'chatbot wizardry'

16 Dec 2020

Here at Dunstan Thomas, we've been studying the increasing use of automated advice to support pension accumulation and at-retirement processes. I must thank Pete Connell of Wealth Wizards who provided insights for this piece, which aims to capture how far things have improved since the early days of robo-advice.

It's clear that ‘robo advice' has moved on a long way since its origin more than 10 years ago. Early articles on robo-advice indicated IFAs saw it as a trend which threatened their jobs. While regulators took a dim view of turning regulated advice over to the computers.

However, ‘Robo Advice Mark II', now freshly termed ‘automated advice', is finally being put to work by IFAs and employers alike. The IFA firms embracing it, see it as a powerful way of reaching and engaging a much larger group, most notably their clients' children.

It offers an efficient way of arranging an ISA, pension top-up or transfer without tying up an IFA in talking to the client unless they absolutely need to. Unwarranted consultations are avoided, yet the IFA can support many more clients than would have been possible beforehand.

As automated advice becomes more sophisticated, it opens possibilities to help customers determine recommended pension contribution levels based on desired retirement age and income goals. Automated advice processes can now help with asset allocation, based on risk profiles and up-to-date fact find data.

Now that the deadline for investment pathways is only two months away, there is a big new opportunity for consumers to gain access to automated advice and ensure that they are put into the appropriate pathway as they approach decumulation, even if they are ‘non-advised' at the start of the process.

Chatbot Wizardry

There is no doubt that the industry needs the machines and their chatbot wizardry to fill the yawning advice gap. The 18,397 IFAs and a further 11,699 restricted advisers (source: FCA 2019) are simply not enough to provide everyone who wants it with affordable financial advice.

The reality is that it is not viable for financial advisers to offer face to face or phone-based advice to everyone who needs it. In any event, many people admit that they cannot afford (or are not inclined to pay for) the fees involved in getting personal financial advice.

A recent consumer study of Generation X undertaken by Dunstan Thomas found that just 9% of 39to 54-year-olds nationwide had consulted a regulated adviser in the previous 12 months.

One company that has been working for several years to address this gap with automated advice is Wealth Wizards. Last year the technology company rolled out its MyEva application and chatbot. This was then initially accessed by users via employers such as: Ipsen, Unilever, the Foreign and Commonwealth Office and Calvin Klein.

MyEva is the first automated advice specialist to be able to program in fully regulated advice to help customers through pensions accumulation, as well as at-retirement decision-making. By asking a series of finely-tuned questions, MyEva can do the job of a Fact Find and go beyond that to complete risk profiling, goal setting and more.

With personal permissions, the app can help consumers to access key valuation and investment performance data. It can also help tease out the financial hopes and ambitions of a willing participant.

MyEva can request and help process the necessary information of providers - requesting pension valuations. It might stimulate members to put more into their pension if its analysis finds higher contributions look affordable, based on analysis of bank accounts (again only possible if the consumer provides these permissions and plug-ins are authorised by them).

The combination of mimicking the human-centric processes IFAs already do, and the rapid crunching of the numbers, is making more people in the pensions space sit up and take notice.

Spotting the Disconnects

Machine learning is iteratively improving the intelligence of automated advice. That intelligence can now be used to spot any disconnects between the financial data the platform holds on the consumer and their latest responses or requests. If any answers the consumer gives do not chime with personal information the provider or the IFA already has on file, this could trigger a red flag in MyEva.

For example, if there is a discrepancy between what the consumer is requesting and their risk profile or level of savings, then this can trigger an alert to the IFA responsible to prioritise that customer for a conversation.

MyEva technology can also be used in the same sort of way to spot vulnerable customers and flag them in databases according to an agreed protocol for supporting them. It should also be possible to use automated advice to help align assets and portfolio selection with personal views on a range of environmental, societal and governance (ESG) issues.

It doesn't stop there. Wealth Wizards is working on new advice scenarios. For example, it's currently developing automated advice capability to support equity release queries.

Pete Connell, founder & chief development officer, Wealth Wizards says: "Every time you look at a discrete advice process, you are looking at what information you need to gather from the customer and simultaneously what facts need to be auto checked - what data feeds are needed.

"However, some of this data just isn't available yet. With equity release, it's important to be able to automatically gather an accurate and up-to-date valuation on your property. However, services such as Zoopla just are not accurate enough to provide the certainty needed to give advice yet."

Connell continues: "As open banking is extended to more financial services providers, it will be possible for our systems to integrate with valuation services to obtain that number, and then use it to present some options to the customer - all within a seamless automated process. That's where we are heading in many areas of financial advice from selecting funds for your SIPP, to buying some additional term assurance."

The Next Generation

One clear area where automated advice can help is to enable IFAs to engage with the adult children of existing clients. In the past, IFAs tended to have no connection or involvement with a client's family unless there was some major family event - a severe illness requiring power of attorney to be activated, or a death in the family for example.

However, it's clearly much better if IFAs can provide automated advice services for a client's children at the point where their Junior ISA comes into their control at age 18 and they may value some automatic advice on investment selections. Services like MyEva will be able to provide that glue which can help IFAs engage the next generation, ensuring that awareness and trust is built before intergenerational wealth transfer begins.

Clearly, as more data is gathered and analysed in an automated advice process, it becomes possible to improve the quality of the advice and take more work off paraplanners and advisers alike.

We must however remain cognisant of the fact that adviser firms are ultimately in control of the technology adoption curve. New technology must be harnessed in such a way that it enhances productivity and supports business goals.

It can be deployed to help close the advice gap - helping IFAs to serve many more clients. It can also help reach and engage the next generation of savers - a generation that is already more inclined to use AI-enabled chatbots, direct to consumer platforms and portals to self-serve, than the generation before them.


On Thursday 18th February, Dunstan Thomas held our first webinar, titled ‘The Coming of Age of Automated Advice’, featuring presentations from Adrian Boulding and Pete Connell. Watch the webinar here:

by Andrew Martin, Chief Distribution Officer at Dunstan Thomas
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Follow Andrew Martin on Twitter: @ajmdunstan or read Andrew's previous article here.