Robo-advice News Wrap: Islamic robo on its way

By David Tuckwell on Friday 30 June 2017

Savings and Investment

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A Shariah-compliant robo-advisor named Algebra is about to set sail in Malaysia. It will target not just rich Malaysians, but rich Muslims everywhere the company has said. It estimates that there is trillions of dollars’ worth of demand for Shariah-compliant robo across the globe.

Pensioners often don’t know where their money is or how much they have – a problem which will worsen in the UK post-2018, when businesses will be forced to give pensions. But robo-advice can ride to the rescue, as it provides a simple one stop shop for disparate pension pools.

Head of BlackRock Australia Dominik Rohe has said that investors will be the ones who win from robo-advice as finance services undergo “Amazonification”, like every other part of the economy. But what will the industry gain? That’s harder to see.

How robo-advisors fit into the legal requirements that financiers provide “best interest advice” has always been obscure. How can a robot determine what’s in a client’s “best interest”? But regulators are starting to catch on and guidelines are becoming more common.

This article first appeared on www.roboadvicenews.com.

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