Robo-advice – still problematic

Though the use of robotic components within the delivery of financial services is developing apace, automation has yet to be proven effective in the provision of full financial advice. Adam Samuel provides an update.

Adam SamuelBA LLM DipPFS MCISI FCIArb Certs CII (MP&ER) Barrister and Attorney may be contacted atadamsamuel@aol.com.For links to where you can buy the second edition of ‘Consumer Financial Services Complaints and Compensation’, see www.adamsamuel.com/book.

In December 2015, Compliance Monitor asked me to write about robo-advice and followed it up in 2017 by requesting another piece on robo-compliance. The resulting pieces raised the usual question-mark about whether there is a real distinction between a robot and computer software. The advice article then raised all the standard concerns about advice being a soft skill that computers and robots are inherently ill-equipped to demonstrate. Yet, a concern was lurking below the surface. If humans are so much better at giving investment advice than machines, how come so much investment advice and discretionary fund management is of such poor quality? Maybe a machine is never going to supply the perfect advice service. It could, though, upgrade what we already have.