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Do consumers understand the risks of robo-advice? – Whitehouse

by: Phil Whitehouse, managing director of MCI Mortgage Club
  • 10/08/2017
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Do consumers understand the risks of robo-advice? – Whitehouse
A study commissioned by the Council of Mortgage Lenders (now UK Finance) will have made for some worrying reading for mortgage brokers.

According to the Digital Change and Mortgage Borrowers research, four in ten customers think robo-advice will be faster and more convenient than traditional mortgage advice.

These statistics made me wonder whether consumers really understand what is involved in sorting out a mortgage.

We live in a world where it’s possible to order something online and have it delivered to your door within a couple of hours.

Consumers can contact companies through live chat and have their issues addressed without even picking up the phone.

 

Can consumers be trusted?

It’s not surprising they want the same kind of service when getting a mortgage but you cannot treat this sort of major financial decision like buying a new TV.

True robo-advice could never offer the type of advice a broker can and never is it more important to get sound advice than when you’re taking out a mortgage.

Robo-advice should surely be about using technology to get to better and quicker decisions and in some ways empowering the customer to input more into the decision-making process.

But in reality, can the average customer be trusted to do this properly with no repercussions affecting advice? I doubt it.

 

More efficient

That being said the house buying process could certainly be more efficient and technology has a huge role to play here.

Indeed, while the fact almost half of customers would back robo-advice may be the most headline grabbing element of the report, perhaps the most useful finding is that many customers want a blended approach – with digital options and human contact.

And it is here where we should be looking to develop.

A joined-up approach of man and machine where technology is utilised but not dominant and the importance of sound advice takes precedence over everything else – including speed.

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