Michael Bloomberg steals the SIFMA NYC show by putting his finger on a great robo shortcoming

Mr. Blumberg equates robo advice with advice, rather than robo advice being a tool that makes the continuous comprehensive counsel required by statute possible, in support of fiduciary duty and professional standing of the broker. Continuous comprehensive counsel is simply not possible without the necessary enabling technology (robo advice). This sort of technology is essential for advisors and aspiring brokers to be accountable for every recommendation they have made, establishing professional standing.

Mr. Rosenthal’s celebration of the industry denying the retail investor of the same consumer protections afforded to all other investors might explain why the industry has lost the trust and confidence of the investing public. Wouldn’t it be news that the SIFMA supports the honor and integrity of the broker by acknowledging and supporting the fiduciary duty of the broker in acting in the best interest of the investing public.

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In my humble opinion, Mr. Bloomberg is missing an important point. Robots can be used by advisors to automatically optimize the ETF holdings in a portfolio and also automatically changing weights as necessary. The important role of the RIA advisor would be to recommend the right robot (algorithm) that best fits the financial plans and risk level designed and recommended by the advisor to the client. Once this critical value has been added by the advisor for the fees charged, the robot would do the routine work of sending trades to the broker, and maintaining the asset value report as required by compliance. If individual investors decide to use robots directly as offered by their brokers then, its their decision and their risk or reward! I don’t believe that an advisor should shy away from using a robot as long as she/he knows how to add the real value, beyond what a dumb robot can do!