Today, the super fund industry is more dynamic and competitive than ever. According to KPMG’s Super Insights 2020, this is because “the superannuation sector is at a tipping point–shaped by the Royal Commission and now rocked by COVID‑19.”

So, how does the provision of digital advice for super members fit the equation? With financial advice in its top-10 key focal points of the report, KPMG states that “with the financial advice sector changing significantly and adviser numbers declining as a result of regulatory developments, now is the time for trustees to review and develop their advice strategy and operating model, so they are in a position to provide their members with affordable financial advice.”

We are, therefore, witnessing an unparalleled level of activity across the super industry—catalysed by the need to deliver members the right type of advice at the right price and at scale.

With future-proofing creating a burning platform, funds have begun to ratchet up their value proposition analysis—with the provision of robo advice sitting front and centre.

So, how does a fund get from point A to B? From nothing to a fully functioning and well-received robo advice service that can complement existing advice services? And the more pressing questions: Is an in-house software build the way to go? Or is it best to buy it from a trusted technology partner?

The DIY-robo-advice-software race

Building your own robo advice software is a little like competing in a marathon—but with minimal training. You turn up on race day and seem to manage the first 5km; the next 10 are a bit of a struggle, and then you hit the 20km mark—you’re worn out and dehydrated. You realise there were factors you didn’t consider, training you should have done, and better diet choices you could have made.

As an outsider looking in, a build-your-own-software approach seems doable. You have an in-house tech team to figure things out, and there’s even someone to project manage. But is that enough?

Successful self-built robo advice software takes thorough preparation, planning and significant resourcing. Even before you start the digital advice race, there are several aspects to consider so you can ensure you’ll make it across the line.

With any software development and implementation, budget is the most considered factor. When looking at a DIY build (instead of purchasing), it’s vital to ensure you are comparing apples with apples. While there can be a big on-paper bottom-line difference between building and buying, the vast majority of costs associated with software don’t come from initial development but instead from continued maintenance and support.

For an in-house build, you’ll need to ensure your team has the capability and capacity; including the:

  • appropriate in-house technical expertise
  • ability to develop stable software
  • expertise to provide ongoing maintenance and data security
  • understanding of the impact of ongoing regulatory and compliance obligations for advice delivery and future software development
  • experience in executing API connectivity, and
  • resourcing for continuous support, monitoring, data security and reporting requirements.

It’s also important to understand that building your own robo advice software often means you’re only getting a minimum viable product in the first instance—rather than fully robust and road-tested enterprise-grade software.

With all factors considered, and unless you are confident your team has what it takes—digital advice software is better bought than built.

Robo advice software—best left to the experts

Firstly, the generic term ‘robo advice’ means different things to different people. Once you decide on your fund’s digital advice offering, you can then find a technology partner to match. The right partner will help you create a compliant, consistent and trusted digital advice service—one that fits your plans and ladders up to your goals.

It takes skill and focus to develop genuine end-to-end robo advice software, not to mention expertise for navigating Australia’s complex and highly-regulated financial advice industry. A technology partner with business viability and a user-centred approach to software design and development means you can rest assured that your software will be well-executed and delivered on time (at a much greater speed than an in-house build).

Buying your robo advice software means your members (and your fund) will have an array of projection and modelling tools to use. These critical tools sit in the back-end, crunch data, model scenarios, and compare and assess your members’ advice strategy options.

A good technology partner will also ensure these tools integrate with all of your fund’s systems. Therefore, any time a member changes their details, these amendments are reflected in real-time across all systems.

Choosing to buy robo advice software also means your integrations are taken care of. Through the use of APIs, your educational content, report generation and data analytics (to name a few) are all connected from the get-go. This level of integration and automation can be a challenge to execute and achieve with an inexperienced in-house team at the helm.

Run the right race

Deciding on robo advice software is a big-impact decision. You are embarking on something that could potentially impact most—if not all—of your members and their financial future.

Buying your robo advice software from a trusted technology provider (instead of a DIY approach) means you will end up with robust, stable, secure and supported robo advice software—and predictable ongoing costs.

But what does that really mean for your fund? Skipping out on the software-building marathon leaves your fund with enough puff to enter and finish a race that it’s already well trained for: servicing members. As a fund, this provides the space to focus on delivering a holistic member experience complemented by an unparalleled online service that members will engage with, enjoy using, and above all, benefit from time and time again.