In helping the old, robo-advice no substitute for humans: State Street

By David Tuckwell on Tuesday 26 September 2017

Savings and Investment

It's always better to have a human being at the end of the line

Robo-advice is no substitute for a human advice in helping the elderly, State Street says.

Two-thirds of those aged 60 or older go into some kind of cognitive decline. Yet only 39 percent of investors have a “suitable” plan to deal with it, new research by finance giant State Street has found.

And a robo-advisor, State Street said, is not a suitable plan.

“It’s always better to have a human being at the end of the line,” said Brie Williams, head of practice management at State Street Global Advisors.

“[But it] depends on how sophisticated the robo-advisor is. If it’s pure asset allocation and there is no checks and balances … then it will be difficult.

“You need the connectivity to know who your client is.”

Among the big three ETF providers – BlackRock, Vanguard and State Street – only State Street has been a holdout on robo-advice.

BlackRock bought chunks of two robo-advisors: Berline-based Scalable Capital and San Francisco’s FutureAdvisors. Vanguard, by contrast, runs one of the biggest robo-advisors in the world.

But State Street has deliberately stood aside, as more and more ETF providers (including newcomers Charles Schwab and Fidelity) have joined the game.

The company hinted why in a blog post earlier this year.

“How can we leverage the power of our people if we don’t make a personal commitment to them?” State Street said.

“It’s not that we can’t rely on technology. But if we automate and innovate for tech’s sake only, then we’re creating nothing but more noise.”

This article first appeared on

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