Watch: What is Robo-Advisory 3.0?

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In the first of our video series with Nick Hungerford, the Portag3 Ventures partner and Nutmeg cofounder defines ‘Robo-advisory 3.0’ and its significance.

What is Robo-Advisory 3.0 — with Nick Hungerford


There's been three phases of robo-advisory since we started in 2010. And we're finally in 2019 into what is officially 'advice'.

  • Phase One was about simple online wealth management. How can we give people access to a wealth management service? That wasn't just trading? It was about managing portfolios online.

  • Phase Two, was much more sophisticated in the product arena. How can we give people passive as well as active choices? How do we give people socially responsible portfolios?

  • Phase three, is all about actual financial advice as it's defined by the regulator. In financial services, the word advice is very particular to think about the problem: 'I've got some money. What do I do with it?'

Actually what we were doing in Robo advice—at Nutmeg and other companies—is saying, you've made the decision to invest, let us help you with that investment, which is, of course, one step removed from what advice in a regulated sense 'advice' actually means.

Robo advice 3.0 is finally living up to its name. And I think that's going to be transformational for consumers. This is a fantastic opportunity for every player and every part of the value chain.

So let's say you are the asset manager of producing product, you've been trying to sell this product to people who don't know whether they particularly need it or whether it suits their ambitions, all that is going to go out the window, because now the distribution problem is solved for you.

If we can harness the power of the technology, in order to help all sides of the Value Chain produce better results for the consumer, then it then it will also benefit increased profits for those who are actually supplying the consumer.

Robo advice has opened everyone in wealth management's eyes to the possibility that the internet has a major part to play in this industry. It has been an industry that for 300 years has relied on direct face-to-face contact. You know, I love this and I've been predicting it for years: the idea that, when you have automated financial advice, and you decide to go shopping, when you choose a jumper that's maybe £50 instead of the one that's £30, a little widget will pop up from your wallet, say, 'hey, you really can't afford this, but you could choose the £30 jumper, and put the £20 in your pension, it'll be worth £250 when you retire'.

And I mean, this is where we're going. I mean, it's a fantastic future of financial security for people to solve their financial problems in a much simpler way and in an elegant fashion.

I'm sure that there'll be interactivity—other payment gateways as well which be fantastic.


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