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AI The Almighty Buck United Kingdom Technology

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.
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RBS Cuts Hundreds of Jobs As FCA Approves 'Robo-Advisers'

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  • by iserlohn ( 49556 ) on Wednesday March 16, 2016 @10:28AM (#51707499) Homepage

    Blind allegiance to profit is causing society's downfall.

    • by Richard_at_work ( 517087 ) <richardprice@nospAM.gmail.com> on Wednesday March 16, 2016 @10:37AM (#51707571)

      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.

      • This is very very little in difference

        WTF is this?!?

        • 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

    • by Anonymous Coward

      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

    • 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

    • Given they threatened these jobs to undermine democracy and influence the outcome of the Scottish independence referendum at the bidding of their Whitehall masters, it's a bit of a kick in the teeth to shed these jobs anyway.

      http://www.theguardian.com/bus... [theguardian.com]
      • by iserlohn ( 49556 )

        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.

  • by NotDrWho ( 3543773 ) on Wednesday March 16, 2016 @10:35AM (#51707549)

    "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!"

    • by AmiMoJo ( 196126 )

      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.

    • 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.

    • "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.

  • by sinij ( 911942 ) on Wednesday March 16, 2016 @10:37AM (#51707577)
    Majority of people are financially illustrate, or at least that how banks justified loot-and-pillage MER (management expense ratio) for most consumer-facing mutual funds. Now that they are switching to robo-advisers, how are they going to justify charging that?
    • by creimer ( 824291 ) on Wednesday March 16, 2016 @10:43AM (#51707607) Homepage

      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.

    • 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.

      • by sinij ( 911942 )
        Yes, MER is associated with the product, but managers of said 'product' set MER based on its sales model. When you invest into a mutual fund based on advisor recommendation, they have to pay commissions to your guy. These fees get baked into MER.

        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.
        • 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

    • 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!

    • 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

  • Funny thing (Score:4, Interesting)

    by MrKrillls ( 3858631 ) on Wednesday March 16, 2016 @10:53AM (#51707703)
    I have no idea how well or badly the low end investor will be robo-advised ar RBS, but I'm pretty sure that a few pieces of financial advice, that could practically be dispensed on one side of a small piece of paper, would be the core of excellent advice for 99.9% of everyone.

    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)

      by BarbaraHudson ( 3785311 ) <barbarahudsononline AT gmail DOT com> on Wednesday March 16, 2016 @10:58AM (#51707729) Journal
      The human advisers have no skin in the game - they make money whether you do or not. At least with a robo-adviser, you'll pay less in fees.
      • True. Any time one has such advisers, one's bullshit detector should be set on full power. They can be very good and guide and educate, or they can be thieves or anything in between.
    • Advisors in this context are really just salesmen. Most folks involved in the Stock trade are either salesmen trying to get you to buy stocks they get a kickback on or "Vulture Capitalists" who do what are called "leveraged" buyout where you borrow money to buy a company's assets, sell the assets to pay the loan, pocket the difference and shut down the company.

      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
  • by Coisiche ( 2000870 ) on Wednesday March 16, 2016 @11:00AM (#51707757)

    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.

    • by qbast ( 1265706 )
      Oh call the fucking waaaambulance. Human lawyers are expensive anyway, this will add low-cost alternative. You still will be able to pay through your nose for human lawyer.
    • by mentil ( 1748130 )

      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.

    • 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.

    • > 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

    • it's why here in the states we just passed a law (which our highest court OK'd) to allow companies to force you into private Arbitrage w/o lawyers.
  • 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?

  • 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.

    • 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

  • 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.

  • by millertym ( 1946872 ) on Wednesday March 16, 2016 @11:38AM (#51708059)

    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.

  • 6 months of liquid assets for the short term. Retirement savings as follows: 110 - your age% in a S and P 500 index fund, the rest in a bond-index fund high rated corporate bonds and/or treasuries.

    It's what I've stuck with, don't feel like paying for managed funds, or high cost "advisors".
  • "Please state the nature of the financial emergency."
    • "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. . . "

  • There are no "advisors" talking to you from banks, these are sales people. Their "advise" is aimed at you buying what's most profitable for the bank. Whether those advertisements are dispensed by humans or robots does not really make any difference.
  • It's much easier doing everything online.

    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.

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