Would you take banking advice from a robot?
Robots will soon be giving investment advice to banking customers as Royal Bank of Scotland (RBS) reveals its new robo-adviser service.
Starting Monday, the robo-adviser service from RBS will be rolled out at NatWest branches to over 5 million customers, designed to give advice to people wanting to invest as little as £500.
The new initiative from RBS aims to help those customers lacking confidence to invest alone, without the high fees and in-depth financial advice around topics such as tax and inheritance planning.
In order to receive the service customers will be asked to describe their circumstances, goals and attitudes to risk in investments. Taking this information, the robo-adviser service will advise how to invest and what fund is best suited to that particular person.
The service also aims to provide advice to those customers who have been miss sold investment information in the past. The robo-advice service doesn’t just give initial advice to customers, but instead tries to build a long-term investment plan.
Collating together all the data NatWest has on its customers, the service will consolidate that to make an informed, accurate decision in the best interests of the customer and the bank.
Furthermore, RBS and NatWest aim to use the service to address concerns of people across the UK not saving enough money and will use robo-advice to encourage customers to put away funds for the long term.
Granted funds are graded according to the level of risk involved in the investment and the costs involved within the process will amount to 0.95% of the investment, paying for the advice, fund investment and platform fee.
Services will offer the same risk-rated funds that are available to customers on its execution service to ensure continuity within the branch.
There are many benefits to be brought to customers, from clever saving, more in depth advice and future planning but the banks will also benefit from the scheme.
Other banks such as HSBC are also planning to implement robotic advisors in the future and similar services, as a means to offer investment products to customers.