Robo-advice: the good news

A few blogs back I grumbled at some length about this robo-advice thing, basically saying the word “robo” is bad and the word “advice” is even worse (the latter because “advice” isn’t at all what customers think they’re buying – they think they’re buying a nice, simple, packaged, online investment).

However, looking back on it, I wonder if I may have accentuated these linguistic negatives somewhat at the expense of a more important positive.  I’ve been banging on for literally years about the need for the investment industry to start developing product concepts that are designed to make sense to consumers in the post-face-to-face-advice era, and – despite the regrettable confusion generated by the name – I’d say that these new robo-advice services are pretty much what I’ve been talking about.

The proof of this is arguably to be found in the way that full-fat DIY-ers look down their noses at them.  For individuals happy to spend hours every week on their Hargreaves Lansdown account rebalancing their portfolios, a fully-packaged service which requires nothing more of the customer than a single short questionnaire is altogether a bit on the simplistic side.  But the thing about those individuals – as, again, I’ve said many times – is that there aren’t very many of them.  For millions and millions more of us, that single short questionnaire is just about all that we can be bothered with.

As I say, it’s not at all good that we’re still using the word “advice” to describe these propositions even though the most important and attractive thing about them is that they don’t actually involve or require any.  But there you are.  In the horribly hidebound world of investment, an innovation that’s even partially successful is something to be celebrated.

2 thoughts on “Robo-advice: the good news

  1. The first time I landed in America, in New York, the immigration official, a proper New Yorker and upfront black woman, took one look at my passport, took one look at me and said, “If you’re a copywriter, how come you so thin?”

    What impressed me was that she knew what a copywriter was. In America, they are a kind of frontier hero. Same with financial adviser.

    In the UK, people still think a copywriter is something to do with copyright and patent and that a financial adviser is a diddler.

    This is a general point, to say the least. But in the absence of any other comment, I humbly offer it from the floor, or gutter in my case – I maybe should have taken more financial advice than I have, but I assumed they were all diddlers, like Richard Hillman in Corrie, who nearly did away with our Gail, rightly or wrongly.

    • Without any research at all the matter, I’d be prepared to bet that the average UK Immigration Official, on seeing the occupation “copywriter” in a pasport, probably thinks the person in front of them is somebody who copies other people’s writing for a living. In the UK at least, “copy” is generally a negative word – usually harking back to classroom cheating.

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