Why automation (Robo) in the Investment Management industry is a win-win scenario

I’m not a huge fan of budget airlines as flying is a means to catch-up on movies that I have not made the time to watch in theatre. This is my first time flying Air Asia and the experience has been quite nice, actually. I am missing the in-flight entertainment system of traditional airlines but the friendliness of the attendants makes up for it.

Being in the digital wealth management business, Robo-Advisory remains a hot topic and buzzword in the industry. I can honestly say that the use of Robo-Advisory is misunderstood by and large by the public and by wealth management professionals. Digital wealth management stretches far beyond Robo-Advisory; however, being on an airplane brings attention to how much we have accepted technology and automation in our lives and entrusted the technology to enrich or make mundane and even complex processes more efficient. Robo-Advisory is simply investment management, automated.

Commercial aircraft, like the one I’m on right now, are outfitted with avionics/computer equipment that will essentially fly itself once destination coordinates have been entered. Pilots likely guide the plane during takeoff/landing and monitor the avionics equipment to ensure the plane is on course and not flying into unpleasant weather or turbulence. The rest of the time, the avionics equipment automates the entire flight process.

For most of you who are reading this, it’s nothing new. Computers have been flying planes for decades. We accept and allow computers to assist the pilots to get us from Point A to Point B, safely. Avionics have not reduced the number of pilots required to navigate an aircraft. Why then, is automated investment management or Robo-Advisory such a big deal when we blindly trust the aircraft’s avionics system? Just because the investment management process has been automated, it does not necessarily mean the financial advisor must be removed from the equation and the process is on permanent autopilot.

Robo-Advisors can be outfitted to navigate market conditions and identify investment opportunities for the investor. Every now and again, the financial advisor can check in on the Robo-Advisor to ensure it is not veering off course and intervene when necessary. Much like a pilot when taking over the aircraft during takeoff/landing or when there is turbulence.

We accept automation in many aspects of our lives without question, as we believe automation and technology will enhance our lives. Robo-Advisory is no different. When a financial advisor adopts Robo-Advisory into his/her practice, the complex and time-consuming task of monitoring portfolios and identifying investments is removed from daily activities. With all that free time, the advisor can now invest it back into the investor/client and create high touch relationships and reduce the number one complaint that clients have regarding their advisors, which is lack of communication. Furthermore, advisors will free up more time to grow their business. Automation of the investment management process is a win for the client and a win for the advisor.

Jovin Shen

Head of Sales & Marketing


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