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What do you think of we someone mentions jobs being replaced by technology? Maybe you flash on the automated checkout counters at your local grocery store, or you picture an assembly line powered by robots. What you probably do not figure on is one of those robots choosing stocks for you – but maybe you should. ‘Robo Advisors’ are now a thing, and more and more they will have a say in your portfolio.

robot at the table

Okay, it is not likely to be quite that cut-and-dried – financial advisors will not be asked to pick up their briefcases and march out of the office so that a fleet of robots can take their seats. And to be really accurate, Robo Advisors are not really robots who pick stocks. Instead, they refer to automated services that ask users a series of questions (‘what is your investment horizon?’, ‘what is your risk tolerance?’), then use an algorithm to come up with a plan that users can tweak as they would like. That done, they provide automated portfolio management services. Fees for use tend to be lower than going through an actual human advisor, which is of course a draw to many.

The best known name in the Robo Advisor game is probably Betterment, a digital investment startup out of New York that in March raised $100 million in venture financing, taking its total valuation to $700 million and making it more than a niche player. Even more significant is that the established names in finance – T. Rowe Price, Charles Schwab, Vanguard – have been making significant moves to broaden their use of computer-managed investment portfolios.

The job implications of using robo advisors are not readily apparent, and no one thinks that they will completely replace the role of humans in finance. After all, you cannot pick up the phone and scream at your Robo Advisor when the markets are down and have him or her reassure you that they have seen this before and that things will get better. In many cases, technology will likely be a tool that complements human advice, rather than replaces it. Still, the head of T. Rowe Price’s new dedicated ‘quantitative management’ arm, Sudhir Nanda, is being quoted as saying that many jobs in finance would be done more efficiently and cheaply by computers and that ‘humans aren’t going to be completely replaced, but that they will be mostly replaced’.

Up to now, we have mostly seen and worried about lower skill, lower education jobs being replaced by technology. The discussion over Robo Advisors brings an unsettling new trend to the fore, namely that jobs that have traditionally required more training may be at risk as well. We are still in the early days of the transition, but clearly we need to keep our eyes on the robots.