Slashdot Mirror
Are Robots Coming To Take Investor Jobs on Wall Street? (nypost.com)
From an article on NYPost: More investors are warming to the cold, steely embrace of the increasingly sophisticated, low-cost automated robo-advisers. The primary reason is to save money on those fees and charges. Nearly one in three investors says these machines are superior at picking stocks and lessen their risk, and almost as many say the machines are better at selecting investments for retirement than human brokers, according to a new study of US investors by market research and consulting firm Spectrem Group.
To what question? Different investors are looking for different outcomes. Some are risk averse, some might be bet-it-all-on-red, some might be looking to gain exposure to different market segments, others might be wanting to diversify...
If robots replace investors, at least we could program them with some empathy.
There's a big difference.
I'm crying all the tears for those rich wall street investors who will get outsourced. Really, I am.
What happens when everyone has an algorithm?
Flash crash
“He’s not deformed, he’s just drunk!”
It comes down to the law of large numbers. You cant predict stock performance anymore than you can predict football game outcomes because too many variables and people are moving on the "field." Traders never outperform the overall market in the long term. Not EVER. Bots wont be better at it than humans since they run the same retard algorithms which are no more accurate than a gamblers "system." Buy an index ETF and avoid fees altogether. What a sales desk can do for you is give you access to unorthodox investing instruments that don't exist to those of us poor people with nothing more than E-Trade account. If you want to buy mortgage back securities or ABS notes you need to go through a desk and have 7 figures sitting with them. Regular investors don't get to play with these things but stock picking is for morons who failed stats.
Wallstreet wants so desperately to increase the number of coders to make cheap labor. It is hilarious when coders fight back by diminishing the value of business people.
Employees owning shares is one of the great benefits a company can offer. Creates loyalty and incentives to be better for the company. It is a shame that more companies don't offer it.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
"The Robot isn't licensed, so they are illegal" - now that it is the Wall St types, they will sing another tune
-- 73 de KG2V For the Children - RKBA! "You are what you do when it counts" - the Masso
It has been shown in the past that Monkeys, Small Children, and even random number generators are better than most investors at picking stocks and shares to invest in ...
http://www.telegraph.co.uk/new...
http://www.automaticfinances.c...
Puteulanus fenestra mortis
Yes. The answer is 42. Don't let the door hit your ass on the way out.
They're all looking for the same outcome: making the most money. The "outcomes" you described are just different strategies for achieving that one outcome.
The evaluation function for AI financial advisors is ridiculously simple compared to many other applications of AI: how much money does it make? It'll just be an arms race of who has the best algorithms until an equilibrium is reached with everyone making the most money possible (probably a rate of return equal to world GDP growth), which will eventually be punctured by some event outside the consideration of the algorithm, kicking off another race, repeat.
His solution may not be correct, but your response amounts to, "Problems, what problems? The system doesn't have any problems! Nothing to see here!"
No, it depends of the insider trading information you feed into the bot.
Everything I write is lies, read between the lines.
Why not just do a little bit of research yourself and pick some funds that are inexpensive and meet your needs. You'll do much better studying some Vanguard or Schwab funds and investing in what is appropriate, than you would letting somebody (or something) do the work for you. This isn't a part of my life where I just want to "save time" and "not be bothered". This is your life savings. Take it seriously.
Given that the Trump administration is wanting to repeal of the Department of Labor's Fiduciary Rule and Section 1033 of Dodd Frank...
That is the rule where your financial advisor needs to act in the investor's best interests as well as disclose any conflict of interests.
A robot might be a much better option going forward..
Correction: they are all looking to make the most money based on what they perceive is an acceptable level of risk.
Someone with $10M might be willing to go "all in, make me the most money assuming I'm willing to lose 50% of it", while someone approaching retirement with $1M might be willing to say "make me the most money assuming I'm only willing to lose 2% of it."
In my experience with a not-publicly-traded company that decided to create an Employee Stock Ownership Plan (ESOP), it was just a way for the owners to take cash out of the company without selling it on the market. Turns out they allotted shares worth 1/3 of the company to the ESOP, and had the coroporation borrow money in order to purchase those shares from the owners and give them to employees instead of contributing to 401Ks (I called it the "all eggs in one basket retirement plan"). The owners got cash and the employees got non-voting shares that dropped in value every year (especially 2009).
First, I work as a Financial Guy. CFP, to be exact, giving advice. We see robots as competitors for low-end, low-margin accounts with people we probably wouldn't want to do business with anyway or people who we'd tell "Do these few things, build your savings, and as your situation becomes more complicated come find us or someone else you trust." Your average Broker or Insurance Salesman might be in trouble (miiight), for sure, but for those of us who give more complex advice and do financial projections, robots are going to be a looooong time before they replicate the kind of nuanced interaction people get with a full service advisor. Is your robot going to handle your spouse's death settlement paperwork and give you support in knowing someone is allowing you to grieve while they handle the bureaucracy of it? Is it going to give you a quick answer about your SEPP contributions (maybe, yeah), or know-how about your Solo 401(k) for your new business, the tax implications that may directly apply to you given your goals, help you put that together, keep it compliant? What would end up happening, since there are so many possibilities, is that a robot would end up asking so many questions that the person would simply give up and wouldn't be able to answer many of them even if they persevered.
Yes, we're computers, but we ask for all the data (ok, let's automate that), input it (automate this too!) then synthesize it given a process developed through exchanging Natural Language (which AI still has a hard time processing) with clients, then spit out advice. Those last two bits are real toughies.
Yes, it can happen some day.
We'll use AI as tools to enhance human advice; replacing it altogether would be nearly impossible/mostly foolish as others have also pointed out.
Yes, some people will come back and say,"Bu bu bu attorneys and CPAs are gonna be automated!" and to that I say the same as for us: Extremely basic issues? Sure, automate them! We want that too, it would make our jobs simpler so we can focus on the complex and interesting and important stuff instead of the mundane crap we're saddled with right now. Please please PLEASE automate the mundane shit! In fact, that's part of my job at the practice I'm in because our company is too slow/shortsighted/bureaucratic to make the tools for us.
Also.... compliance. When a person takes a robot's advice and shit goes south, who's liable? You think auto insurance is gonna get weird? The investment industry is MUCH more complicated (though simpler in some ways). Could it be done? I think so. It might actually be nice in some ways:
"James, bring up Mr. Blibbleblump's accounts please. What were his annualized returns, after fees, for the last five years? Please print us both a copy and notify Fidelity we're rolling over his ex-employer's 401k into a new IRA account here."
If that could be done by a robot... and it really should... that would make my life miraculous and wonderful. It would axe an admin assistant, but that stuff is menial, soul-crushing, and horrible. I'd find something else for that person to do such as direct client service or relationship-building or marketing.
Overall... I suspect it's a very long time away, at least for actual advisors and not just brokers. Even for brokers (I'm not as well-versed in this universe, but have known some fancy-pants ones), the complicated stuff is WAY more complicated than an AI can handle at this point, and even if it could someone would need to monitor it; the big boys will still have jobs and I suspect it will stay that way for a while.
Also, Betteridge's Law, so "No."
-
Wait until the potential owner is a computer or robot. Imagine a robotic stock trader sending profits to an owner-robot and the robot exists only to advance itself by making enough money to always have bleeding edge hardware. The world of commerce could actually slip out of mortal hands.