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U.S. Bancorp Launches BlackRock Robo, SigFig Gets $50M Infusion, and Robos May Soon Get Ethical

June 21, 2018

Robo-advisors are both competitors and partners for traditional financial advisors, as recent news from U.S. Bancorp Investments and SigFig suggest. But advisors who think robos will never be able to offer truly personalized financial planning or act as true fiduciaries may be in for a surprise — artificial intelligence may help digital advice platforms develop not just smarts, but a conscience, according to the Wall Street Journal.

U.S. Bancorp Investments has rolled out a robo in partnership with BlackRock’s investment advice firm FutureAdvisor, InvestmentNews writes. The new offering, which requires an investment of $10,000 or more and comes with a fee of 0.5%, will give clients access to U.S. Bancorp strategies using FutureAdvisor’s automated platform, according to the publication.

Meanwhile, SigFig, which offers a robo-advisor direct to investors as well as one for large financial institutions, has just raised $50 million, according to Reuters.

The San Fransisco-based startup founded in 2007 plans to use the money to build out services to clients such as UBS and Wells Fargo, according to the newswire. Mike Sha, SigFig’s CEO and co-founder, tells Reuters that banks have been looking for fintech firms to partner with. SigFig already helped Wells Fargo launch a robo-advisor in November, according to the news service.

Robos may be able to automate many tasks but critics contend that they can’t compete with their human counterparts for two reasons: robo-advice can’t be personalized, nor can it ever be truly fiduciary, the Journal writes.

“A robot has no consciousness, no ethics,” Vasant Dhar, a professor of information systems at New York University’s Stern School of Business who runs a robo advisor for institutional investors, tells the paper.

That could change, however, as robos, aided by AI, accumulate more data, according to AI specialists cited by the Journal. This isn’t likely to occur soon, they say, if at all — but if it does, an algorithm may be able to be a better fiduciary than a human advisor, the paper writes. After all, algorithms would not be tempted to recommend certain products because of incentives, according to the Journal.

(Getty)

Robos could also one day be able to interview prospects rather than rely on the current questionnaires for risk assessment, for example, the paper writes. And robos may be able to glean a lot more information about clients’ lives by tapping into data through a platform resembling Amazon.com, according to the Journal.

By Alex Padalka
  • To read the InvestmentNews article cited in this story, click here.
  • To read the Reuters article cited in this story, click here.
  • To read the Wall Street Journal article cited in this story, click here.