GlobalData Plc

Wealth Wizards: robo-advice for pensions

Robo-advice that can provide personalized recommendations in high volume at low cost will improve access to retirement planning advice. This will narrow the advice gap for those with smaller pots and help individuals make the most of new pension freedoms.

Wealth Wizards is a digital financial planning advice provider which has introduced the concept of robo-advice to the UK pensions market. It partners with employers to offer their staff pensions and retirement advice, as well as general financial planning services, as an employee benefit. Wealth Wizards’ aim is to make financial advice affordable and accessible to all. It’s an online IFA which offers fully regulated advice via an online app. The platform is also offered as a white-label solution to other financial services providers.

With regards to pensions, Wealth Wizards offers robo-advice in two main areas: instant personalized advice for employees building up their workplace pension, and advice for those approaching retirement and wanting to explore their options.

At present, digital solutions are primarily being used or developed within the pensions market to encourage individuals to save for retirement: Aviva’s “Shape my Future” tool, PensionBee, and the governments’ pension dashboard, for example. Using technology to provide advice at retirement is a less explored area.

The issue is that retirement planning is such a complex area, and the amount of information that is needed to be able to give advice is huge. Robo-advice will need to be able to replicate this. Services will either need to give a recommendation or simply help individuals decide for themselves.

Wealth Wizards’ Paraplanner tool uses a hybrid of human and digital to provide start-to-finish retirement advice in less than two hours. The tool generates a regulated advice solution made up of an annuity, a drawdown, or a blend of the two.

The need for low-cost advice has increased since pension freedoms have given individuals greater choice and flexibility in how they take their pensions. Robo-advice that can provide personalized advice in high volume at low cost will therefore improve access to advice, narrowing the advice gap for those with smaller pots.

Wealth Wizards’ model of providing advice through employers should additionally improve access to and engagement with this advice. Employees’ touchpoints with their pensions are through their employers, and so it seems logical that employers should facilitate this access.

The Wealth Wizards platform is white label and so can be adopted by numerous financial services providers such as pension providers and financial advisors. The platform will be attractive as it will reduce advice costs for employers and – for those looking to provide added benefits for their employees – it will also put them at a competitive advantage.

It is technology such as this that will shape the intermediated channel for both insurance brokers and financial advisors.

By Danielle Cripps, General Insurance Analyst

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