President Donald Trump has taken steps to loosen crisis-era regulations on financial advisers, who may face an even bigger threat from new technologies that help people with investing.
“Bots are squeezing their flesh-and-blood competition and threatening the jobs of thousands of human brokers in the $20 trillion U.S. wealth management business,” reports the New York Post, citing data from research firm Spectrum. “Nearly one in three investors says these machines are superior at picking stocks and lessen their risk, and almost as many say the machines are better at selecting investments for retirement than human brokers.”
Trump last week signed a memorandum to delay and possibly cancel a federal rule requiring financial advisers to have a fiduciary duty to investors. Supporters of the rule say it protects consumers by requiring brokers to disclose conflicts of interest and to recommend lowest-cost 401(k) plans, while the financial services industry says the restrictions limit choices of investments.
The millennial generation that has been entering the workforce for the past 15 years is more comfortable using technology to make investment decisions.
“Rookie investors — many of them millennials — are more often using robo-advisers than human ones,” the NY Post reports. “Robo-advisory, less than a decade old, may expand much faster than experts originally forecast.”
The growth of robo-advisers pushed traditional asset managers to cut fees and develop new technologies.
“We’re hiring from the competition at Fidelity, Vanguard and Schwab, and training some of our own experts,” said Jon Stein, CEO of New York-based Betterment, the largest independent robo-adviser, with $7 billion in assets under management and a staff of 220, told the NY Post.
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