Of course, the real question is whether users will want to entrust their hard-earned cash to a robot, says Tech Times in “Bank of America Wants Robots To Be In Charge Of Giving Financial Advice.” Wells Fargo and Morgan Stanley are interested in similar systems, and the executives at both banks say that younger customers won’t care if algorithms are placed in charge of financial issues.
Robo-advising, as it’s been called, has increased in popularity over the past few years. It’s being popularized by companies like Betterment LLC. Launched in 2010, this service essentially allows high earners under age 50 to enter their information and goals, after which, algorithms suggest investment opportunities, typically at low-risk.
Banks are interested in robo-advising because these systems could be very beneficial in cutting costs. Banks wouldn’t have to hire as many employees. With full-service brokers typically charging annual fees of at least one percent on a $100k investment, the difference could be more than $50,000 in savings over 20 years, given the same annual returns.
Human advisers will still need to manage more nuanced situations, especially when it comes to high-end clients. These will include things like estate planning and tax advice.
Reference: Tech Times (November 6, 2015) “Bank of America Wants Robots To Be In Charge Of Giving Financial Advice”
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Author Bio
Kim Hegwood
Managing Attorney
Kim Hegwood is the Founder and Managing Attorney of Your Legacy Legal Care®, a Houston-based estate planning and elder law firm she established in 1998. A graduate of South Texas College of Law, Kim was inspired to focus her practice on elder law and estate planning after watching her own grandparents struggle with the challenges of aging. With nearly 30 years of experience, she helps families with wills, trusts, powers of attorney, Medicaid planning, and asset protection.
Kim is a Certified Dementia Practitioner and a member of the National Academy of Elder Law Attorneys, and her firm has been named Best Trust & Estate Law Firm by the Houston Chronicle. A mother of three, she spends her free time with her children and grandchildren and volunteers with several local charities.
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