Robo-advice is  starting to rotate towards Australia
Mercer plans to introduce a self service options for the Australian self-managered super fund (SMSF) market in 4Q15. It will only be partially automated, members will complete an online questionnaire and then log in to the website or contact the call centre to make changes. It will compete with domestic robo-advisors Stockpot and foreign providers in the AUD 2 tn superannuation sector.
Super's robo adoption

Robo-advice applications extend beyond self-service portfolio management, and indeed may have a role to play in Australia's fast-growing $2 trillion superannuation sector.

Mercer, an asset consultant and super fund manager, is due to introduce a robo (my words, not Mercer's), or self-service option later this year. Under the Mercer model, super-fund members will receive advice on optimal contribution amounts and the most suitable investment options by completing an online questionnaire. Members will then log in to the website or contact the call centre to make any changes to their super arrangements. In other words, the model is only partly automated.

Renee McGowan, chief customer officer at Mercer, freely admits that the new service, slated to be launched in the fourth quarter of 2015, will be a "learning exercise". While the fund expects that over time more members will want to use these sorts of online tools, it remains to be seen what level of human interaction members require at the moment.

Mercer believes that self-service tools such as its proposed offering might be attractive to about 20 per cent of its super fund members, although that figure would be expected to increase over time as balances grow and savers become more engaged. The theory is that the 10-20 per cent of members who are most engaged feel comfortable enough to make their own decisions, while 60 per cent of members have no interest in their retirement savings and will remain in the default option. It is the 20 per cent in the middle that is the target audience.

"Most funds would have 20 to 30 per cent of members who might use a service such as this," says McGowan. Given the amount of chatter in the industry, more super funds can be expected to launch similar services in the not-too-distant future.

Returning to the fully automated portfolio management tool, one of the challenges for robo-advisers, or indeed for their customers, will be the process for making changes to investors' risk profiles if their circumstances change. In many cases it is up to savers to report changes in their circumstances, such as a divorce, to the robo-adviser. The more prompting there is from the automated adviser for clients to report any changes, the better for everyone.