Ever since I first heard about robo-advice it has been a disappointment to me.
Not because I am against the principle of it – although I reckon it does present some problems – but because in my imagination it was a much more futuristic and scary notion.
I had visions of seven-foot robots telling people which funds to shove their money in. I may have watched too much science fiction but I foresaw a towering metal beast standing over quivering consumers, impatiently waiting for them to sign a client service agreement.
“You have 20 seconds to comply,” the robot would roar, “and then you have a 14-day cooling-off period to change your mind”.
But the future is seldom as depicted in fiction, as those who noticed that the original Blade Runner was set in November 2019 can attest to. That month passed with no sign of a dystopian robot-filled world or flying cars drifting around above our heads.
But robo-advice is here and is slowly changing the world of finance, despite fears from regulators, consumers and traditional advisers.
And the debate is set to rumble on throughout 2020 as more companies set up their own digital advisers.
But despite the hopes of some that it could boost their business, we should remind ourselves that robo-advice is not a replacement for expert financial help from a person.
Frankly, it is just a bit of computer software that used algorithms to work out what may be possible investment or savings solutions for clients. That, of course, could be hugely helpful in explaining to people some of the opportunities open to them.
But I can only ever see robo-advisers, or digital assistants, as a small part of the financial advice process. They are akin to the slightly annoying chatbots that pop up on almost every online commercial site you visit these days. They can be a boon if you just have a simple query but they are hopeless if your question is a little more complicated.
All digital assistants have limitations, which is why no-one should rely on them to give them detailed financial advice. Sure, the robo-advisers can help guide people towards, say, a balanced portfolio. In fact there are several advantages they offer, not just convenience, which means everyone will be using digital assistants in the future.
It will be a boon, for instance, that they can be consulted 24 hours a day, which will give busy people more flexibility about choosing when they sit down to consider their financial affairs.
And if there are simple matters to be sorted that can be done with the help of a digital assistant, then that should ease the administrative burden on traditional financial advisers.
There are lots of reasons to welcome the growing spread of robo-advice, from both a consumer point of view and a financial adviser point of view.