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US advisers clock up plenty of face time: report

US insurance advisers spend 62% of their time talking face-to-face with clients, a new report from Cerulli Associates says.

This includes 21% of their time meeting current clients. They also spend 16% on plan preparation and 14% on new client acquisition. A further 10% of time is spent dealing with problems.

Administration takes up 19% of insurance advisers’ time, with 4% allocated to compliance.

Training and development accounts for 7%, and 23% of time is spent on investment advice, because US advisers sell pension-based products.

The researcher’s Associate Director Tom O’Shea says the amount of time advisers spend with clients means they still have a role, despite the growth of robo-advice.

“There is a misconception that digital advice means no human interaction between the customer and the firm delivering the advice,” he said.

“Cerulli has found even the most automated advice platforms allow a consumer to reach a representative through a toll-free number or online chat.”

The researcher questioned direct firms and found consumer satisfaction increases at least 15 percentage points when a human is involved in delivering advice.

It says the term robo-advice is deceptive “because most robo-advisers offer clients access to a representative via the telephone, web chat, or video chat. Cerulli believes several retail direct firms will enter the digital advice market because these firms grow by realising new ways to scale their interactions with consumers.

“Digital advice is an obvious and powerful opportunity for direct firms to build scale.”

After questioning US wealth managers that use robo-advice, Cerulli arrived at a typical client for the channel. They would be 27 years old, earn $US80,000 ($111,283) per year, have $US100,000 ($139,118) in savings and a goal to retire by the age of 67.

Cerulli says firms providing robo-advice are expanding their services beyond the direct-to-consumer space. They are including automated financial management systems to link human advice with a back-office service to the customer.

“According to Cerulli research, 54% of millennials are comfortable with an online advisory relationship,” the report says.

“All financial services firms will find they must deliver advice via the internet, further increasing the convergence between the digital and the human element.”

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