Man or machine? The future of financial advice

From the man-made monster depicted in Frankenstein (1818) to today, both fascination and fear have surrounded the potential for humans to create artificially intelligent forms that might enhance or perhaps undermine our wellbeing. Adam Samuel deconstructs the issues involved in utilising ‘robo advice’ in the financial services industry.

Adam SamuelBA LLM DipPFS MCISI FCIArb Certs CII (MP&ER) Barrister and Attorney may be contacted at adamsamuel@aol.com. His book, ‘Complaints and Compensation: a Guide to the Financial Services Market’, is available from his website, www.adamsamuel.com.

There has been a recent burst of excitement about robotics as a form of financial advice or a means to achieve other financial services goals. In the compliance community, there are two perfectly natural but opposite reactions to this. First, much of financial services is actually about how human beings feel in a very unrobotic sort of way. Attempts to automate this sector have a tendency to go horribly wrong as firms forget the human element or simply fail to understand the limits of their machines. The second view says that robots, like computers and other machines – such as the one that makes a standard biro – are here to stay and to assume that they will not be used or cannot be engaged with to produce acceptable outcomes is an invitation to redundancy. In practice, both reactions are correct.