My name is Russell Hutchinson and I run a business called Chatswood Consulting - Most people know me for my articles in Asset and Goodreturns, or my blog at www.chatswood.co.nz - the personality of my work is quite different, columns are there to make people have second thoughts about something and to laugh. But In my business I'm all about DATA and ANALYSIS and PROCESS ... - most of my business is actually INSURERS, and few banks, and quite a few BROKERAGES... - So my views will tend to reflect the work I do, who I do it for, and the way I do it. You may disagree! QPR - my business is becoming increasingly focused on advisers again because of the focus on Quality Product Research, which runs Quotemonster, which has about 3,000 advisers using it regularly.
BUT you know your business, and we may know some interesting things too, we're here to share, not lecture ... We will pause near the end of this session to take some questions about robo-advice and we’re glad to really get stuck in on those when you are ready
AND, we're not prescriptive, there are "many best ways" to run an insurance brokerage... This is just our view
PUT LEGAL STATUS TO ONE SIDE, I’LL GET TO THAT
But there are plenty of “nearly” robo, and “nearly” advice
We’re particularly interested in ”nearly robo” and “ROBO-TO-ADVICE”
We like those services because we think that’s where the best robots will be deployed – we think that robots to support advice, take people towards advice, and enhance the quality of advice are the real winners
Full robo advice, while interesting, tends to happen for services in larger markets that are more standardised, and commoditised.
PLEASE TAKE A LOOK AT THESE TOOLS LATER AND ASK YOURSELF WHETHER SOMETHING SIMILAR COULD BE DONE WITH INSURANCE…
Insurance has some wider challenges:
They only have to look at “How much do I save” and “Which fund (or how much risk to take”
WE HAVE MULTIPLE PRODUCTS, MULTIPLE “HOW MUCH” QUESTIONS TO LOOK INTO, AND MULTI-DIMENSIONAL TRADEOFFS
Things like – do I take less cover or higher excess? Do I remove a cover? Do I switch provider? Do I choose the one with the tougher underwriting limits but better definitions? Should I own this or my trust? What about naming beneficiaries? What about my business insurance?
We need better robots than these… OR MORE LIKELY, WE NEED A COOL ALLOY OF ROBOT AND HUMAN.
STAY WITH THE CONSUMER ROBOTS FOR A MINUTE – WHY ALL THE FUSS?
CAN ROBOTS DO ALL THESE? ……….. PROBABLY.
OF COURSE, WE ARE IN THE EARLY DAYS OF ROBOTS. THEY WILL ALSO COST MONEY, ANNOY PEOPLE, BREAK THE LAW, TURN CLIENTS AWAY, AND DAMAGE REPUTATIONS
STILL, WE WILL DEVELOP THEM AND USE THEM ANYWAY………. THAT’S WHAT HUMANS ARE LIKE
BUT ALL THESE THINGS COULD APPLY TO OUR “ROBO-TO-ADVICE’ CATEGORY TOO…
So, it turns out that robo advice is illegal? Not really, and its all changing, plus: remember, robots are our friends.
AT THE RECENT FINTECH CONFERENCE AT THE END OF LAST YEAR WE TALKED A LOT ABOUT THE TECH WE HAVE AT OUR DISPOSAL AND HOW IT CAN BE USED
THESE ARE THE ITEMS THAT WE LIKE BEST
EXPLAIN AN EXAMPLE OF EACH
TAKE YOUR TIME
FOCUS ON JUDE AT THE END
THE THING I LIKE MOST ABOUT THIS LIST IS THAT ALL OF THESE ARE LIVE AND BEING USED RIGHT NOW
I suspect that most robo-services will be about the pathway to advice, assist in advice generation and delivery, and improve ongoing advice services. It can make good advice available to more people at less cost.
AND THERE ARE SOME GREAT IDEAS FOR
ANOTHER WHICH WE ARE WORKING ON WITH SEVERAL ADVISERS IS AUTOMATING ANNUAL REVIEWS:
Not all advisers do annual reviews Those that do them budget resent the cost of mail, which is frequently discarded, and the effort in phonecalls which are frequently unwelcome
We can do better.
With an automated review process we can email every client For those that don’t open the review we can re-send in a few days time with a different header The email can compare their current cover to the cover most commonly bought by people like them. If they are under the average we can show them what they need to buy We can ask them questions about what they have done recently – changed job, got married, had children, started a business and so forth For those that look at the review and don’t act we can remind them… We can see who opened it, when, and how often. We can tell if they forwarded it to anyone We can automatically quote upgrades We can provide a button which connects to a call centre, or another robot who will book your appointment… we can do that all NOW Suddenly a tedious waste of time and effort can be made to be so much more efficient
AND THAT IS JUST ONE EXAMPLE
With all this awesome capability, you wonder…
… well, NO…
But there is a proviso.
Your job will change a bit.
But trust me, I can still prove that the robots are your friends, provided you can change.
I don’t believe you will be replaced, I believe you will get better robots, and some of you here today will have a hand in designing them too
Look at this comparison.
On the left is a retail health robot. I love mine. I don’t‘ seem to use the actual health professionals any less. In fact, they keep thinking up more reasons and more ways for us to spend time and money on our health. So much so, that our lives have got a great deal longer.
In almost every sphere of life the consumer robot is not as good as the professional one.
You CAN buy amazing drones. But the pros spend more and use them better Your CAR has a great computer in it. But the engineers have a much more complex diagnostic computer TRUE, there will be drone cars: but whole new groups of jobs will emerge from building, testing, new roads, guides, and many, many, more.
Heck, we even have a comparison in life insurance LIFEDIRECT is the consumer robot, and QUOTEMONSTER is the adviser robot. QM prices and researches more than 20 times the number of products than LD does. The combination of humans and robots together makes amazing things possible.
Just as an aside, creativity is a critical factor in advice. Dynamically spotting when you need to lighten the mood, tell a joke, or get serious and call your clients to face their fears, is a very human activity. They don’t owe the robot the honesty. They only owe that to another human.
As another aside, at the Guggenheim gallery in New York they currently have one of these industrial robots as part of an incredible installation. Arguably the best of their current works. The robot is the installation. The human was the inspiration.
ADVISERS ARE CATCHING ON
Prospecting is the single most time consuming activity we have in most insurance sales.
The second most time consuming is compliance. Typically, compiling the SOA.
I don’t think we can make you entirely redundant from either activity, for all but the most basic work.
I think we can make you a heck of a lot more effective.
AT THIS POINT I WOULD LIKE TO TAKE SOME QUESTIONS BEFORE SUMMING UP.
QUESTIONS …………………….. QUESTIONS…………………
Introductory - robo advice for insurance financial advisers
Prepared by Russell Hutchinson
Please refer to the copyright information on the final page before copying or distributing
INSURANCE ROBO-ADVICE IN NZ
Situation Review and Future Prospects
“Can enable a compliant personalised advice recommendation to be made without
the requirement for a human adviser to be responsible for the advice”
• robo ‘nearly advice’ – best example: LifeDirect
• ‘nearly-robo’ advice – some adviser tools are like this, Quotemonster is one
• ‘technology enhanced advice’. – some great service include kiosks and Suitebox
• 'robo-to-advice' uses combinations of tools to help clients self-qualify, or complete
aspects of the advice process themselves, to bring them better prepared into an advice-
giving discussion with an adviser.
There is a lot of room for development of effective services in each of these areas. We are
very interested in developing services for advisers in the last category.
ROBOTS YOU CAN USE NOW
• Originate as portfolio management tools
• Tend to be offered by companies selling direct
• Compliance drives some of these projects
Look up these:
What you will find:
• Assumes behaviour change
• Very little ‘why’ or motivation
• Narrow scope goal
• Directed approach
• Escape lanes
THE PROMISE OF ROBO-ADVICE
• Save money – when you achieve scale they are cheaper than humans.
• Increase access – allow more clients to reach a product avoiding a slow
• Control compliance risks – robo-advice is controlled and not subject to
human error. However actual robo-advice failures are usually systemic and
may affect large numbers of people.
• Help clients find the right channel – because there is a big shift to
commencing the sales process online, robo advice can act as a series of
gates to ensure clients are directed to the best channel to meet their
• Improve offers – bundling a particular form of advice with the product may
improves the whole package for the customer
“Can enable a compliant personalised advice recommendation to be
made without the requirement for a human adviser to be responsible for
• Therefore not legal in New Zealand under the Financial Advisers Act 2008
• Exemption from the law being consulted on in June 2017
• Individual exemptions likely
• Full-robo permitted under the Financial Services Legislation Amendment Bill
which may be law in late 2017, with a transition period to full implementation
of around two years
• A robo-process may be legal provided a financial adviser is responsible for
the advice. That adviser must be a natural person
• …but many of the adjacencies are:
• Nearly-robo advice
• Nearly-advice robo
• Technology enhanced personalised advice
• FMA concerns that will need to be addressed in regulations:
• Financial literacy
• Escape lanes
• When the client is unsure
• Final checking
• Why policymakers and regulators will support robo-advice:
• Licensing organisations (now QFEs, future FAPs) is more efficient
• They get to manage to a document – the licence conditions, not to
principles, which are harder to interpret
• They get to manage algorithms and system logs, rather than
conversations and memories
• Regulatory risks:
• A risk of excessive regulation of ‘calculators’
• The risk that there won’t be a law change
• Caps and category limits
THE TECH WE’RE EXCITED ABOUT
THE NEED FOR ROBO-SERVICES
Most robo-services will be about the pathway to advice, assist in advice
generation and delivery, and improve ongoing advice services. It can make
good advice available to more people at less cost.
ROBO IDEAS FOR INSURANCE
• Enhanced engagement with consumer
• Sorting clients to the right channels: Seamless passing between online-
direct, call-centre-direct, face-to-face advice, and others and Managing
leads flow from your website to advice channels (internal, owned, alliance,
• Upselling from: KiwiSaver, or other low value direct, travel insurance, life-
only, mortgage insurance – you name it, to full personalised advice.
• Serving orphan clients: especially those that you have no current address
for who will look for you first online
• Providing advice to clients with access problems: time-poor,
overseas/remote, don’t like advisers
But will the robot steal your job?
PROFESSIONALS GET BETTER ROBOTS
PROFESSIONALS GET BETTER ROBOTS
NZ ADVISERS EXPLORING ROBO-ADVICE
• Every week an adviser approaches us with ideas for online services – but
don’t call them a robot!
• New comparison tools are opening these opportunities up
• New needs analysis tools make online advice more possible
• Automating annual reviews makes it safer for an adviser to help more
• There are lots of other ideas to work on
• Use simple robo-to advice widgets to enhance your web and social
• Pricing widget – helps clients stay because they’ve done shopping
• Simple forms widgets - encourage clients to engage and self-qualify
• People like us – a referral tool that creates leads
• Auto-renewals – reduces the work at renewal time, and creates new
• Use more technology to enhance compliance and save time in
developing your recommendations and writing SOAs
• Start to map your advice processes
• Use tools like head-to-head, simple needs analysis,
and underwriting requirements
• For bigger projects, contemplate plugging in other resources such as
Call centre, webmail, online lead generation systems and more
• That all of you can benefit from robo-to-advice and robo-nearly-advice
tools to make your job better / easier / and quicker
• The customer will love all that and can collect information and self-qualify
and self-select the right channel for their purchase process – and get
better and better advice with the optimum combination of systems and
• We can get capture and manage data to allow for continuous
improvement in the sales process
Chatswood Consulting Limited specialises in providing marketing, distribution, and
product development services to financial sector companies: insurers, fund
managers, banks, financial advice firms, and industry associations. Chatswood
works with companies to develop and manage new marketing opportunities
channels for financial services business.
Russell Hutchinson Rob DowlerKelly Pulham
Our team includes:
Strategy, sales and
Industry and compliance