Stay up to date with notifications from The Independent

Notifications can be managed in browser preferences.

Goldman Sachs: Would you trust its robo advisors with your money?

A growing number of finance houses are looking to digitise financial advice. Whether that's a good thing remains to be seen

James Moore
Chief Business Commentator
Tuesday 21 March 2017 17:40 GMT
Comments
The Terminator. Could this be your future financial advisor?
The Terminator. Could this be your future financial advisor?

Your support helps us to tell the story

From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.

At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.

The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.

Your support makes all the difference.

How would you feel about the prospect of a T-1000 Terminator robot sitting down to talk to you about your ISA courtesy of Goldman Sachs Skynet?

No, don’t laugh. Goldman’s wants to make it happen. Well, it at least wants to create a bot capable of providing financial advice to the masses. But given it's Goldman, there are a lot of people who may feel the Terminator analogy is apt.

This, after all, is the “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money” .

Matt Taibbi’s memorable description of “the firm” was used in an article about its role in the 2008 financial crisis and the speculative bubble built up in mortgage backed securities that explosively popped.

It hasn't ever quite shaken it off and there are many who will shudder at the prospect of the squid using robots to provide financial advice to Mr and Mrs Mass Affluent.

But not everyone will feel that way. Don't forget, the Goldman names carries considerable cachet.

It’s almost always close to the top of the list when companies are seeking advisors to help them out with deals. And it’s not just wealthy and powerful corporations that beat a path to its door. The wealthy and powerful individuals that run them also seek its advice when it comes to their personal finances.

There are a lot of people lower down the food chain that might quite like the idea of showing off about the performance of an investment portfolio created for them by Robo Sachs. Yeah, this new set of golf clubs? Robo-Sachs came through for me. You should try it!

Tapping into advising the so-called "mass affluent" - people with cash to invest but without the means to be able to pay for a human to hold their hands - could provide a rich stream of earnings in future and I’d a imagine there are a considerable number of people in that group who might view the Goldman Sachs brand as aspirational. Goldman's hires the smartest people, if it creates the smartest robots, why wouldn't you?

Well, I wouldn't. But we're not there yet. The story emanated from the Reuters news agency, which spotted a Goldman Sachs job ad seeking people to help build an advice platform. When it approached the firm for comment it declined.

However, a lot of finance houses are working on similar projects, so if Goldman is planning to create Robo Sachs to advise the mass market, it wouldn't be alone. Cyber space may soon be full of them.

Is that something we should be comfortable with? We’ll see. If Robo Sachs is like the kid in Steven Spielberg's AI and makes people rich too, they’ll wonder what the fuss was all about. If it turns Terminator we might just need to call upon on Mr Taibbi's literary prowess again.

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in