Of course, the real question is whether users will want to entrust their hard-earned cash to a robot, says Tech Times in “Bank of America Wants Robots To Be In Charge Of Giving Financial Advice.” Wells Fargo and Morgan Stanley are interested in similar systems, and the executives at both banks say that younger customers won’t care if algorithms are placed in charge of financial issues.
Robo-advising, as it’s been called, has increased in popularity over the past few years. It’s being popularized by companies like Betterment LLC. Launched in 2010, this service essentially allows high earners under age 50 to enter their information and goals, after which, algorithms suggest investment opportunities, typically at low-risk.
Banks are interested in robo-advising because these systems could be very beneficial in cutting costs. Banks wouldn’t have to hire as many employees. With full-service brokers typically charging annual fees of at least one percent on a $100k investment, the difference could be more than $50,000 in savings over 20 years, given the same annual returns.
Human advisers will still need to manage more nuanced situations, especially when it comes to high-end clients. These will include things like estate planning and tax advice.
Reference: Tech Times (November 6, 2015) “Bank of America Wants Robots To Be In Charge Of Giving Financial Advice”
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