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It's a lot less bovver...than a robo adviser

By Ian Millward, published 21 May 2018.

A couple of weeks ago I bought my first robot and splashed out on a Flymo robotic motor.

Being a financial man, I quickly worked out that the 2 hours a week saved for probably 8 months of the year multiplied by a cautious life expectancy of 5 years (that’s the mower not me by the way) meant at least 300 hours of time recouped. So, while not a cheap purchase, it valued my labour at not very much an hour, making it very justifiable for a hardworking mum and dad with teenage children and a dog to support. I know there’s a counter argument that with teenage children I should never have to worry about mowing the lawn, but let’s not go there!

From self-driving cars to lawnmowers the world of artificial intelligence is upon us. The day of the robot is coming and financial services has caught this bug. ‘robo advice’ and ‘fintech’ are the buzzwords of the last couple of years. As with any new sector, we are seeing a plethora of new launches hit the market and there is no shortage of backers pumping money into these businesses, albeit fee paying customers appear harder to come by.

Now I am incredibly impressed by the idea of a car that can drive itself. I can’t quite imagine the technology and intelligence at work to allow a car to drive and safely react to all the distractions and dangers of the road. I very much look forward to the day when my car can drive me from A to B and it seems that day may not be too far over the horizon. So, I was intrigued to see the technology at work with my lawnmower. And actually, it was very unsophisticated.

I laid a wire around the perimeter of my lawn so it knows when to stop and another across the garden that leads it back to its charging station when it starts to get tired. And that’s about it. The mower just wanders around in a completely random fashion. It does a great job and I’m delighted with it, but the level of artificial intelligence is in fact very low.

Which means me back to the robo advice sector. Are we talking self-driving car … or lawn mower?

Currently it is the latter. When we talk to a potential new client a lot of the conversation is about helping them understand their current investments and pensions. A robo adviser doesn’t do this. Then an enormous amount of time goes into listening to them and understanding their history, likes and dislikes.

We are all irrational at times. Experiences of the past influence decisions of today. So deciphering existing investments and pensions and then chatting, questioning, listening, challenging, prodding and probing are the key skills. Again a robo adviser doesn’t do this. In fact the whole concept is currently something of a misnomer. What you get is a beautiful website and a smooth risk process that generates a sensible portfolio for you. But there is no advice. Putting together the portfolio is the easy bit about we do and it usually happens at the end of a very long journey.

I don’t mean to detract from the sector. I don’t think there is any doubt that it is here to stay and will get better. We are big fans of anything that involves shaking up the old guard and their fat margins, verbose language and lack of transparency so we watch the sector with a lot of interest. Just don’t go kidding yourself that you are buying a self-driving car when what you are actually getting is a lawnmower!

In fact I think the FCA agrees, it’s just announced the robo advice sector needs to pull its socks up over the suitability of advice given.