Whatever profession you are in, you’d be well advised to have one eye on what a computer is starting to do, that you currently get paid for. Robotics have spent the last few decades tearing through the industrial work force at a pace. This has been good for consumers who like lower prices but undoubtedly bad for whole communities who were heavily reliant on employers who were able to mechanise their jobs.
This was an extension of the Hardware revolution that started with looms and continues today as robotics automate more and more of what we do. Anyone with a desk job has probably fared reasonably well through this period as there has been a premium on jobs that require some brain labour rather that physical labour.
This is starting to change as a Software revolution takes hold and robo programmes (the code version of their earlier steel incarnations) start to do the jobs that were enjoyed by those with a white rather than a blue collar.
Given the rapid increase in shopping online it is not inconceivable that we will see the day when the large out of town supermarkets look a little devoid of human life and they become distribution hubs for automated delivery vehicles. Why in the future would you pay a percentage to an estate agent if Rightmove was able to list the property for you (delayed by the fact that Rightmove was set up by and is owned by estate agents)?
In another topical example and subject to Google’s lawsuit, Uber is trying to get rid of the only human element in its business model by developing driverless cars.
Software is now able to guide you through your tax returns, draft simple legal documents for you and, dare I say it, advise you on your investments. These pieces of code will only get better with time and look to swallow up more and more of the job market. IFAs like us only exist because we have an information advantage over our clients – we know more about their finances than they do. This information advantage is shrinking rapidly in the internet age where all knowledge, past and present, is stored and accessible.
Now this can only go so far, without jobs none of us earn and therefore can’t spend money on the goods and services that are being automatically produced.
The first effect is to drive the professions into only looking after the wealthiest who have the most complex tax, legal and financial needs. Is this right?
Well, at Altor we have our concerns but think that maybe, yes it is. Robo advice will give a more consistent outcome at a lower cost (much like driverless cars) and therefore it is likely to be absolutely the best way for people with smaller portfolios to save and invest (let’s pick a figure and say £250,000 and rising).
Advisers would be well advised to not try to compete in this area.