Automated Advice is Not as Objective as You Think

There has been a wide trend in recent years to use automated investment advice as it is seen to be more objective, cheaper and readily available when needed; though some of that is certainly true the objectivity part is not as straightforward; algorithms are set up by humans and so they will come with some of the same biases as a human financial adviser; if investors accept automated advice as truthful then they will most likely not do the required amount of research to ensure they are making the right investment decisions; there are steps that can be taken, lawmakers can force robo advisors to disclose potential biases and second opinions should be encouraged regardless of advice; as we become more automated next practices still should be heeded, especially when it comes to our financial lives. Source.

  • Todd is the host of PitchIt: the fintech startups podcast, a weekly interview show featuring emerging fintech founders and leading venture capitalists. He is responsible for leading the content team which covers fintech through daily & weekly email newsletters, editorial, virtual events, and in-person conferences. He has been covering fintech, banking, and venture capital for more than 15 years, including speaking regularly at industry events.

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