Your IndustryFeb 11 2016

Robos will make advisers redundant in five years

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Robos will make advisers redundant in five years

Advisers could find themselves out of a job if developments in artificial intelligence continue to gather pace, Phil Goffin has warned.

Speaking at an event organised by Tisa in London today (11 February) the director of innovation at technology provider IFDS said the next development in robo-advice would be cognitive computing.

Cognitive computing is a form of software that mimics the human brain and is able to weigh up problems which don’t necessarily have a right answer.

It is already being developed by companies such as IBM, Google and Facebook.

Mr Goffin said breakthroughs in this technology could see advisers being made redundant.

He said: “The reality is you don’t need that person there. The UK has said that by 2020 35 per cent of the UK’s workforce will disappear through computing power.

“Your financial adviser has a really challenging future. The only way to have a future is to embrace that technology and add value on top, which is where the smart companies will go but it is hard to create a value proposition with that.

The only way to have a future is to embrace that technology and add value on top, which is where the smart companies will go.

“When this will happen is now. Within five years it will be in the market properly for computers. Robo-advice in the way we are talking about it now has a limited lifespan.”

This would pose questions for companies which have already invested in robo-advice, Mr Goffin said.

He said: “Our industry has invested in legacy technology and that’s not a good thing.

“We are struggling as an industry to move up to the next level. This industry is struggling with cloud technology and the cloud is ubiquitous.

“If you look at what the consumer gets from the asset management industry it is woefully inadequate.”

One of the examples Mr Goffin gave was IBM’s development of Watson, a computer capable of answering questions which has won US quiz show Jeopardy and which has been used to help diagnose patients.

Mr Goffin complained the development of fintech within the asset management sector has been moving at a “glacial” pace compared to banks.

He added that incumbent firms could have an advantage over start-ups because they have deployable capital, strong brands and diversified products.

Phil Stevenson, director of Cheshire-based Ark Financial Planning, said: “It is nonsense. I don’t think robo-advice is nonsense and there is absolutely a market for it but it will not take away from what we do.

“It is a people business and people like dealing with people.”