RBS Cuts Hundreds of Jobs As FCA Approves 'Robo-Advisers' (thestack.com) 78
An anonymous reader writes: Royal Bank of Scotland (RBS) has announced that it will be switching customer advice services over to automated 'robo-advisers' as it cuts 220 face-to-face positions. Given the green light from UK regulator, the Financial Conduct Authority (FCA) this week, the bank agreed that the move would lead to cheaper, more accessible financial advice. Those customers qualifying for personalised advice will now need to have at least £250,000 (approx. $350,000) to invest. Following the FCA's recommendations, it is expected that other UK banks will soon introduce similar 'robo' services.
It's about time we realize (Score:5, Insightful)
Blind allegiance to profit is causing society's downfall.
Re:It's about time we realize (Score:4, Informative)
This is very very little in difference to the current concept of quote engines in the insurance industry where the resulting quotations are classified as "non-advised", meaning there is no opportunity for them to be miss-sold as the entire onus is on the purchaser and not the seller to ensure that what they are buying is correct for them.
In the UK the financial and insurance industry is heavily regulated, to the point where the authority will take something which has been deemed "acceptable activity" for many years and force the industry to refund premiums - the banks are currently in the tail end of refunding over £100Billion in Payment Protection Insurance premiums (and interest) because the FSA (now the FCA) suddenly deemed the way they were sold to be non-acceptable.
So, RBS is just using standard rating systems to present standardised options for low capital investors on a non-advised basis.
Re: (Score:2)
This is very very little in difference
WTF is this?!?
Re: (Score:2)
Financial advisors are running a scam. Their "advice" is designed to maximize their own fees and commissions, rather than the interest of their clients. There was an article in the Economist last week [economist.com] that reported a significant percentage of financial advisors have been disciplined for misconduct, but most kept their jobs, including many repeat offenders.
A software program should be able to give better advice, since at the very least, it has no conflict of interest. Heck, a dart board should give better
Firefox devs should be getting scared! (Score:2, Funny)
If anyone should be scared by this kind of automation, it's the developers of Firefox.
I think the first generation of automation to replace them will just take the Firefox UI and make random changes to it. It will remove widgets, move others around, add random widgets, and so forth. A possible enhancement would be for the automated process to randomly break extensions in some way.
It's the second generation of automation that I think is really worrying. It will just check out the Chromium source code, change
Re: (Score:2)
They cannot do that. Microsoft has already patented that.
Now what's the "Network Neighborhood" called in this release again???
Re: (Score:2)
Re: (Score:2)
I'm surprised somebody with such a low userid would use the word "realize" and then follow it with a bare conclusion, rather than an idea that leads somewhere.
And if they had blind allegiance to profit, it seems they would want to continue forcing the banks to use humans. Why does allowing them to give out less financial advice serve the interests of blind allegiance to profit?
Also, if just not getting personalized financial advice stands in for society's downfall, it seems you're the one with excessive all
Re: (Score:2)
http://www.theguardian.com/bus... [theguardian.com]
Re: (Score:2)
Scotland would be left with a big gaping hole in the finances if Yes won. Oil prices aren't set to recover any time soon. If you don't like the Tories, hell, I don't like them either, but that's a bad excuse for blind nationalism.
Re: (Score:3)
I don't think you realize that UBS is actually doing you a service. Every time I worked with human financial advisers in the past they found ways to shave off a little here and there for themselves or their banks with transaction fees, fund sales, etc. Now that I have enough money to qualify for financial advice (at UBS and elsewhere) I only invest in a self-directed manner via brokers with minimal fee
Re: (Score:2)
Re: (Score:3)
How am I supposed to win in that game?
Unless you figure out how to do better than most, you won't win anything. Realistically, the best you could do is slightly under-perform market, which is still profitable. Now, if you intend to play - start educating yourself on how to do it. Good start would be index e-funds with sub 0.4% MER. If you want to get more sophisticated, get into diversified portfolio of dividend-paying large cap stocks - generally you will save MER but it will increase volatility of your portfolio.
No matter how you invest, s
Re: (Score:1)
if I can find the right, knowledgeable advisor, I can come out ahead.
How would you know, unless you have expertise to evaluate their advice (and in that case do not require their services). Unlike individual products, there isn't even ranking or performance metrics on advisors that is available to regular consumer.
Re: (Score:3)
Advisors' advice under-performs the market.
Having a special poohbah doesn't help you.
His hat is just there to make you think he is important. It is a silly hat because anybody who looks it up knows that his advice will under-perform an index fund, which is the simplest easiest way to get into the market.
The robots can be programmed to give different advise to different people if that is actually useful, just like the humans can be told what advise to give out. In fact, if the humans are giving everybody dif
Re: (Score:2)
LOL, no an index fund will beat any "investment advice" they could be giving out.
Investment isn't zero-sum, you don't have to "beat" anyone. Trying makes it likely though that you'll lose money.
The 1% are not using free investment hotlines for advice. That is actually kinda funny.
Re: (Score:3)
Oh, but I can get the smarter human advise I need to make more money if I already have a significant amount of money, but not until then
With modest amounts to invest your best strategy really can be summed up by a robot: buy index funds. You have to have serious capital to diversify enough to make more money reliably doing other strategies that need active management by a person.
Re: (Score:2)
If you call that squeezing by the 1%, I think you're overstating the value of human financial advice.
It has been negative in recent years mostly.
The human advice that is worth anything, has already been reserved for customers with $1m and more for a long time (at least at the swiss banks).
There are different types of products available above certain limits.
The rest get other types of human advice, namely the worthless type.
In fact, RBS is doing all customers below 250k pounds a favor.
The truely rich clients
"Please repeat your statement" (Score:3)
"Sorry, I didn't catch that last part. Please repeat it again or press 1 to end this call."
"I'm out of work and me kids are STARVING!"
Re: (Score:3)
The UK is often used as a testbed for new ultra low quality service, because we don't complain much. We will put up with all sorts of crap, making us a good proving ground for new customer service ideas because even if it sucks we don't actually go as far as taking our business elsewhere.
Re: (Score:2)
That depends on what the desired result is.
Re: (Score:2)
You're right, this will save 200 humans the indignity of having to answer prank calls all day for a living.
If you're out of work and starving, I don't calling an investment hotline is really a good use of time. Maybe digging up earthworms to eat is a better plan.
Re: (Score:2)
"I'm out of work and me kids are STARVING!"
They wouldn't be starving if Dad stopped prank calling the investment hotline and went to apply for Child Benefit.
How are they going to justify MER? (Score:3, Interesting)
Re:How are they going to justify MER? (Score:5, Funny)
Majority of people are financially illustrate [...]
I'm sure the new robo advisors will provide crayons for customers to draw pictures while their pockets are picked clean.
Re: (Score:1)
MER is associated with the product, not the advice that leads to the product.
If the advice is to take an index tracker then MER is anyway going to be low.
Re: (Score:2)
Good luck getting advise to invest into index tracker e-fund that doesn't pay any commissions. Unless you work with a fixed-fee advice you will never hear about these.
Re: (Score:1)
This quickly becomes a jurisdiction specific discussion. "Independent Financial Advisers" in some jurisdictions are required to advise against the "whole of market", meaning that index trackers will be included in the advice.
Further, "fixed-fee" advice is unlikely to be the target for initial "robo" advisers, it's the individuals getting "free" advice who will first experience this type of service. As a result I believe that the end result will be an improvement of the qualty of advice since the remaining
Re: (Score:2)
well, they need highly trained specialists to program the robots, after all. also these specialists must be third-world imports, because the requisite talent doesn't exist in the coddled west. win-win!
Re: (Score:3)
Most are switching to lower cost MERs anyways. I know I switched a long time ago to ETFs for pretty much this reason.
The thing is the lower-level advisors weren't doing very much anyways. Pretty much why they could be automated.
They just asked some basic pre-set questions and tossed you into one of the general recommendations.
At best, their sales skills came into play.
You're pretty much only getting useful advice if you get real custom advisor, which is more for the wealthy.
The reality is that a lot of whit
Re: (Score:2)
In what way is a spreadsheet not automated?
And nothing is AI, not even AI, if you're going to get hung up on definitions. That is why "AI" is a general term that doesn't have technical meaning. It just means all the classes of computer automation with multiple behaviors.
Offering good advice isn't hard, it is horseshit. Good advice won't beat the market. The only good advice that won't underperform the market is to use an index.
If you have enough money to buy property outright, then that adds another way to
Funny thing (Score:4, Interesting)
Set aside a little to invest on a regular schedule.
Don't sell on market panic. Instead, consider purchases.
Stick with simple, low cost diversified instruments.
And so on.
A robot could do the majority. My concern is the folks with unusual circumstances who need differing advise, or more handholding.
Re:Funny thing (Score:4, Insightful)
Re: (Score:2)
That's not what 'advisors' do (Score:2)
The best quote I've ever heard is this: "Stocks are no longer a means of getting capital into a successful business but of getting it out".
An
Thin end of the wedge (Score:4, Insightful)
Next up, perhaps, "robo-lawyers". Just for the poor people, obviously. There will be a minimum threshold to qualify for human lawyers as we diverge further into there being "one law for the rich".
There will be a minimum financial threshold for more and more things. "Doctor" Watson for the poor, human doctors for the rich, etc.
Re: (Score:1)
Re: (Score:2)
So long as my own robo-lawyer doesn't laugh at me as the judge bangs the gavel and declares 'guilty!', I think I'm ok with that.
Re: (Score:2)
Next up, perhaps, "robo-lawyers". Just for the poor people, obviously.
What do you mean, next up? Legalzoom and similar have been around years now.
Re: (Score:2)
> Next up, perhaps, "robo-lawyers"
You joke, but article research is a huge part of the job of lawyers and their clerks and it is swiftly being replaced with automation, and more automation is on the horizon - to the detriment of a lot of the new crop of lawyer grads.
http://money.cnn.com/2014/03/28/technology/innovation/robot-lawyers/
"Watson the lawyer is coming," said Ralph Losey, a legal technology expert at the law firm Jackson Lewis. "He won't come up with the creative solutions, but when it comes to
Those are comming (Score:2)
Are you kidding me?! (Score:2)
What should I do with my 5000 shares of occidental petroleum?
MY SUGGESTION IS TO -BUZZ- -CLICK- SELL.
Or is it going to be like:
Cortana, I want to buy 5000 shares of occidental petroleum.
I'm sorry, I can't find the stock for irradiated pablum.
No, I want to buy 5000 shares of OCC-I-DEN-TAL PETRO-LEUM.
Ok, I have just put in an order to buy 5000 shares of dental linoleum. The shares have been purchased. Is there anything else I can help you with?
Looks like another niche just opened up for FLOSS (Score:2)
Why pay expensive fees for "Robo-Advice" when you can just as well run your own. Maybe the advice isn't quite as good, but if you do just about as well within a range, the savings on fees is still a net gain. I wonder if something like Mycroft (https://mycroft.ai/) driving an appropriate engine with input from a wide community with the right expertise could produce a 'good-enough' robo advisor to deal with the same situations the RBS ones do.
Re: (Score:2)
You realise that you still need products to sell, right? The advice being given isn't "buy stocks in company x" or "sell now!", its "from the answers you have given, these investment products would suit your requirements".
If this is implemented anything like insurance quotation engines, then each financial advice system will only quote from a restricted set of investment products, and not every investment product available in the entire industry.
The automated decisions on which products to offer is entirel
Actually decent advice for most people (Score:1)
is that they do one of a very few smart things when it comes to investing: brand market funds, low cost, low load. Having a commission-paid advisor for this info just cuts into your returns.
And I would venture that until you have well over $1M US, this advice would serve you pretty well. Stock picking is for fools and people with a lot of money.
Income inequality growth related (Score:4, Interesting)
Outside of the just the concern about robotic systems replacing formerly human jobs is the expanded conversation about growth in income inequality. You know the board of directors aren't going to AI themselves out of their jobs. At least not before everyone else is. Which means all that same corporate profit is funneling to fewer and fewer people.
If there is going to be a serious discussion about how to try to keep free, modern cultures in a healthy state in relation to income inequality, then automation needs to be a part of that discussion.
I was told (Score:2)
It's what I've stuck with, don't feel like paying for managed funds, or high cost "advisors".
Voyager (Score:2)
Re: (Score:2)
"Please state the nature of the financial emergency."
"You have selected 'Regicide'. Press 1 if the Monarch is a King. Press 2 if the Monarch is a Queen. . . "
"Advise" means "Advertisement" in banks. (Score:2)
Who bothers phoning a bank nowadays anyway? (Score:2)
And I'm pretty sure that if you were after investment advice for your $350,000+ you wouldn't be ringing a general help line.