One in a line of financial services firms now offering a ‘robo’ service.
On November 21, financial services firm UBS will launch a new robo-advisor service in the UK. The launch is part of a $1bn initiative to attract younger clientele, with the firm’s wealth management business planning a follow-up advertising campaign in 2017.
The planned ‘robo-advice’ service will ask clients automated questions, recommending a portfolio of investments based on their answers. Often regarded as only a service for the rich, UBS hopes to broaden its offering and attract its desired younger customer base by keeping the minimum investment required to £15,000 – a fraction of the £2m required to open a private bank account with the firm.
The new service aims to ‘help close the advice gap’, according to Jamie Broderick, the head at UBS UK wealth management business, who was cited by the Financial Times. The offering will put the company on par with similar offerings from firms such as Hargreaves Lansdown, but UBS is certainly not the first financial service firm to launch such a ‘robo’ offering.
In March of this year, RBS announced plans to axe 550 staff and replace them with robo-advisors, while BlackRock and Goldman Sachs have also developed similar online investment offerings.
UBS plans to extend the robo-advisor service to other parts of the world, starting in 2017 with Europe and Asia.
The rise of robo-advisors is part of an AI wave disrupting businesses across the board. Concerns surrounding the technology include the replacement of human staff – a fear seemingly made true if you look at the axing of staff by RBS. According to a report from Forrester, by 2021 artificial intelligent agents, or robots, will eliminate 6 percent of jobs in the US.
Brian Hopkins, Forrester’s spokesperson, said: “By 2021 a disruptive tidal wave will begin. Solutions powered by AI/ cognitive technology will displace jobs, with the biggest impact felt in transportation, logistics, customer services.”