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.