Robos invade high street banks
By Mike Narouei, Content Producer at Boring Money
2 June, 2017
The FT reported yesterday that HSBC is the latest bank to join the so-called robo advisers, with plans to offer online digital investment solutions to customers with relatively low balances. It’s a logical next step as quite literally millions of people in cash look at the continued low interest rates available and wonder what Plan B is.
Yes robo advice is gathering pace and according to our research, now has circa £1.1 billion of Brits’ assets under management. Nutmeg (https://www.boringmoney.co.uk/isas-pensions/nutmeg/) has a market share of about 81% today and you can see what we make of the main providers (https://www.boringmoney.co.uk/isas-pensions/).
The question of man versus machine is accelerating. This week my 7-year-old made an aside comment about “when the robots have all of our jobs” which startled me. We’re not there yet in finance and anyone seeking real, old-fashioned, personalised advice is still better off looking for a human. See what people near you have to say about which local advisers are any good on VouchedFor (http://www.vouchedfor.co.uk/). The online models don’t do much more than spit out a Blue Peter “here’s one I made earlier” portfolio at you, and won’t solve your tax or planning questions.
As the debate continues to rage, I thought I’d share what I think is one of the maddest things I’ve seen. The world’s first robotic psychiatrist – naturally, from the USA. Dr Joanne Pranksy is a shrink for robots. Her video (http://www.robot.md/) is worth a watch if you’re feeling like the world around us in the UK has gone mad! Everything is relative……I promise the video will either make you laugh, reach for a glass of wine or want to retire to a dark room!
HSBC isn’t alone amongst the banks with their robo advice offering. Santander (https://www.boringmoney.co.uk/isas-pensions/santander-digital-adviser/) has made very tentative steps towards robo advice with a relatively new offering called Investment Hub (http://www.santander.co.uk/uk/investments/investing-without-advice). The big plus is that Santander customers can see this on the same screen as online banking with the same log-in. The downside is that it’s super dry and doesn’t really engage or inform. Still it’s a fairly simple journey if you can get over the awfully dull bank-compliance-speak and will suit those who want convenience and don’t care about reams of investment choice.
Finally, of all the banks today, Barclays (http://www.barclays.co.uk/investments/) offers the best investment service for its banking customers IMHO. If you’ve a current account there, have a squizz at what they have in the Investments space. Will suit the more confident investor but the fees are pretty competitive.