Financial Advice Cannot be Outsourced to a Machine

While standardised and scalable services can provide benefits via lower costs and greater efficiency, these services are general and somewhat homogenous

Daniel Needham 15 September, 2014 | 3:51PM

The financial arrangements of advice businesses are going through huge structural change as they adjust to disruptive technologies and a new regulatory environment.

Comprehensive financial advice requires human engagement

To manage these businesses more efficiently and to reduce regulatory risk, advisers have increased their use of external risk-profiling services. However, industrialised risk management through off-the-shelf risk-profiling tools is dangerous.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Daniel Needham  is Global Chief Investment Officer for Morningstar Investment Management.

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