Will 2017 Be the Year of the Robo Adviser?

Will 2017 Be the Year of the Robo Adviser?

Clock  3 minute read

Carl Shave Carl Shave | February 23, 2017


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Would you trust a robot with your financial future? It may sound like space-age technology straight out of a sci-fi film, but robo advisers which look after your finances and investments are growing in popularity, especially amongst high-net-worth individuals.

What are Robo Financial Advisers?

Imagine if your financial adviser was permanently plugged into all of the latest data about global finances and your own financial information, and equipped with advanced algorithms and decision-making software that allowed them to make “best practice” decisions about your investments at the slightest fluctuation of the market. Now imagine that you didn’t have to fork out a huge fee in order to retain the services of this uber-smart financial genius, paying just 0.25% of total assets compared to the 1% demanded by human advisers. That’s a robo adviser. Proven to be highly effective and substantially cheaper than a human adviser, robo advisers are rapidly increasing in popularity, particularly with “Generation X”, the tech-savvy, financially aware 31-50-year-olds who account for 40% of all robo adviser users.

The Rise of the Robo

There is a lot of positive buzz surrounding robo advisers out there at the moment. In fact, many experts now believe that these programmes regularly out-perform their human counterparts at certain tasks. Able to crunch vast amounts of data and numbers in mere seconds, without emotionalism or clouded judgment, there is no denying that robo advisers have their strengths. But there are also apparent downsides to these “money-making machines”. In times of political and economic instability, many investors feel less secure about using robo advisers. That is because, no matter how smart an algorithm may be, only humans can truly understand human nature and choose prudent courses of action when times are uncertain. A lack of customer service is another issue which has prompted a number of robo adviser services to develop plans which incorporate a regular review of performance and goals with a “real life” adviser to confirm clients are on track and comfortable.

The Future of Mortgage Advice

So will 2017 be the year of the robo adviser? Possibly not. With so much political and economic turmoil and uncertainty, many investors will feel more comfortable with a human pair of hands at the tiller. Equally, while in the US the top robo adviser firms grew by over 65% in 2014, in the UK the market is much more humble, covering just £1bn of assets in the country. Overall, robo advisers certainly have potential, but during an uncertain year, it may not yet be their time to shine in Britain. Looking for a real, human expert to help you source the best possible mortgage? Consult with the JMB mortgage experts today on 0800 114 3978 or get in touch via our contact form.