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RBS Cuts Hundreds of Jobs As FCA Approves 'Robo-Advisers' (thestack.com)
An anonymous reader writes: Royal Bank of Scotland (RBS) has announced that it will be switching customer advice services over to automated 'robo-advisers' as it cuts 220 face-to-face positions. Given the green light from UK regulator, the Financial Conduct Authority (FCA) this week, the bank agreed that the move would lead to cheaper, more accessible financial advice. Those customers qualifying for personalised advice will now need to have at least £250,000 (approx. $350,000) to invest. Following the FCA's recommendations, it is expected that other UK banks will soon introduce similar 'robo' services.
Blind allegiance to profit is causing society's downfall.
:. Ultimate Control Dedicated/VM Servers
"Sorry, I didn't catch that last part. Please repeat it again or press 1 to end this call."
"I'm out of work and me kids are STARVING!"
SJW's don't eliminate discrimination. They just expropriate it for themselves.
Majority of people are financially illustrate, or at least that how banks justified loot-and-pillage MER (management expense ratio) for most consumer-facing mutual funds. Now that they are switching to robo-advisers, how are they going to justify charging that?
>> I no longer have access to the advise of the human that I think is smarter than the rest of them
I don't think you realize that UBS is actually doing you a service. Every time I worked with human financial advisers in the past they found ways to shave off a little here and there for themselves or their banks with transaction fees, fund sales, etc. Now that I have enough money to qualify for financial advice (at UBS and elsewhere) I only invest in a self-directed manner via brokers with minimal fees and in funds with minimal loads (e.g., Vanguard). Like the guy in the car rental commercials, "You don't have to talk to a human, unless you want to, which I don't."
How am I supposed to win in that game?
Unless you figure out how to do better than most, you won't win anything. Realistically, the best you could do is slightly under-perform market, which is still profitable. Now, if you intend to play - start educating yourself on how to do it. Good start would be index e-funds with sub 0.4% MER. If you want to get more sophisticated, get into diversified portfolio of dividend-paying large cap stocks - generally you will save MER but it will increase volatility of your portfolio.
No matter how you invest, stay away from any kind of investment that doesn't correspond to tangibles - if there are no services or goods produced, then this isn't an investment but speculation designed to make you lose.
He does have a point - you have no idea just how expensive and mediocre this advice is.
Set aside a little to invest on a regular schedule.
Don't sell on market panic. Instead, consider purchases.
Stick with simple, low cost diversified instruments.
And so on.
A robot could do the majority. My concern is the folks with unusual circumstances who need differing advise, or more handholding.
Don't step on the baby.
Next up, perhaps, "robo-lawyers". Just for the poor people, obviously. There will be a minimum threshold to qualify for human lawyers as we diverge further into there being "one law for the rich".
There will be a minimum financial threshold for more and more things. "Doctor" Watson for the poor, human doctors for the rich, etc.
If anyone should be scared by this kind of automation, it's the developers of Firefox.
I think the first generation of automation to replace them will just take the Firefox UI and make random changes to it. It will remove widgets, move others around, add random widgets, and so forth. A possible enhancement would be for the automated process to randomly break extensions in some way.
It's the second generation of automation that I think is really worrying. It will just check out the Chromium source code, change all "Chromium" string values to "Firefox", generate a large random number as the version number, perform a build, and offer it up as the latest version of Firefox.
My suspicion is that the third generation of automation will be much like the second, but it will be able to randomly mark bug reports as WONTFIX or WORKSFORME.
The most interesting thing is that most Firefox users won't even know that the automation has taken place! It will be business-as-usual for them.
What should I do with my 5000 shares of occidental petroleum?
MY SUGGESTION IS TO -BUZZ- -CLICK- SELL.
Or is it going to be like:
Cortana, I want to buy 5000 shares of occidental petroleum.
I'm sorry, I can't find the stock for irradiated pablum.
No, I want to buy 5000 shares of OCC-I-DEN-TAL PETRO-LEUM.
Ok, I have just put in an order to buy 5000 shares of dental linoleum. The shares have been purchased. Is there anything else I can help you with?
Why pay expensive fees for "Robo-Advice" when you can just as well run your own. Maybe the advice isn't quite as good, but if you do just about as well within a range, the savings on fees is still a net gain. I wonder if something like Mycroft (https://mycroft.ai/) driving an appropriate engine with input from a wide community with the right expertise could produce a 'good-enough' robo advisor to deal with the same situations the RBS ones do.
is that they do one of a very few smart things when it comes to investing: brand market funds, low cost, low load. Having a commission-paid advisor for this info just cuts into your returns.
And I would venture that until you have well over $1M US, this advice would serve you pretty well. Stock picking is for fools and people with a lot of money.
if I can find the right, knowledgeable advisor, I can come out ahead.
How would you know, unless you have expertise to evaluate their advice (and in that case do not require their services). Unlike individual products, there isn't even ranking or performance metrics on advisors that is available to regular consumer.
LOL, no an index fund will beat any "investment advice" they could be giving out.
Investment isn't zero-sum, you don't have to "beat" anyone. Trying makes it likely though that you'll lose money.
The 1% are not using free investment hotlines for advice. That is actually kinda funny.
You realise that you still need products to sell, right? The advice being given isn't "buy stocks in company x" or "sell now!", its "from the answers you have given, these investment products would suit your requirements".
If this is implemented anything like insurance quotation engines, then each financial advice system will only quote from a restricted set of investment products, and not every investment product available in the entire industry.
The automated decisions on which products to offer is entirely done based on a rating system, the guts of which are determined by the fund managers of the products on offer.
Advisors' advice under-performs the market.
Having a special poohbah doesn't help you.
His hat is just there to make you think he is important. It is a silly hat because anybody who looks it up knows that his advice will under-perform an index fund, which is the simplest easiest way to get into the market.
The robots can be programmed to give different advise to different people if that is actually useful, just like the humans can be told what advise to give out. In fact, if the humans are giving everybody different advise, that just guarantees that everybody is performing that far under the market. And in that environment, check the fees and commissions; the more highly personalized small investments are, the more you're being shafted. Include all the fees before calculating profit; you'll be way behind an index fund.
Pros generally do not beat the market. There is good advise to be had for small investors, but it is exactly the same for all of them; use an index, meet the market in the middle. Otherwise you are the little fish, and the system is designed for that.
Outside of the just the concern about robotic systems replacing formerly human jobs is the expanded conversation about growth in income inequality. You know the board of directors aren't going to AI themselves out of their jobs. At least not before everyone else is. Which means all that same corporate profit is funneling to fewer and fewer people.
If there is going to be a serious discussion about how to try to keep free, modern cultures in a healthy state in relation to income inequality, then automation needs to be a part of that discussion.
In what way is a spreadsheet not automated?
And nothing is AI, not even AI, if you're going to get hung up on definitions. That is why "AI" is a general term that doesn't have technical meaning. It just means all the classes of computer automation with multiple behaviors.
Offering good advice isn't hard, it is horseshit. Good advice won't beat the market. The only good advice that won't underperform the market is to use an index.
If you have enough money to buy property outright, then that adds another way to invest. There are other options too, if you have a lot of money. If you only have a little bit, advice just means you lose money compared to an index. And if you have these low amounts to invest you can't differentiate or anything, so again, you end up with an index because that is pre-diversified for you.
Oh, but I can get the smarter human advise I need to make more money if I already have a significant amount of money, but not until then
With modest amounts to invest your best strategy really can be summed up by a robot: buy index funds. You have to have serious capital to diversify enough to make more money reliably doing other strategies that need active management by a person.
6 months of liquid assets for the short term. Retirement savings as follows: 110 - your age% in a S and P 500 index fund, the rest in a bond-index fund high rated corporate bonds and/or treasuries.
It's what I've stuck with, don't feel like paying for managed funds, or high cost "advisors".
"Please state the nature of the financial emergency."
There are no "advisors" talking to you from banks, these are sales people. Their "advise" is aimed at you buying what's most profitable for the bank. Whether those advertisements are dispensed by humans or robots does not really make any difference.
Advisors in this context are really just salesmen. Most folks involved in the Stock trade are either salesmen trying to get you to buy stocks they get a kickback on or "Vulture Capitalists" who do what are called "leveraged" buyout where you borrow money to buy a company's assets, sell the assets to pay the loan, pocket the difference and shut down the company.
The best quote I've ever heard is this: "Stocks are no longer a means of getting capital into a successful business but of getting it out".
Anyway the real news is there's so little profit in these investors that RBS isn't even going to bother with salesmen anymore.
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it's why here in the states we just passed a law (which our highest court OK'd) to allow companies to force you into private Arbitrage w/o lawyers.
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And I'm pretty sure that if you were after investment advice for your $350,000+ you wouldn't be ringing a general help line.
To have a right to do a thing is not at all the same as to be right in doing it
If you call that squeezing by the 1%, I think you're overstating the value of human financial advice.
It has been negative in recent years mostly.
The human advice that is worth anything, has already been reserved for customers with $1m and more for a long time (at least at the swiss banks).
There are different types of products available above certain limits.
The rest get other types of human advice, namely the worthless type.
In fact, RBS is doing all customers below 250k pounds a favor.
The truely rich clients have their own staff and private financial advisors, that use the banks facilities for trading and deposits, but nothing else, by the way.
Those are the only advisors that have true benefit.