What if financial advice was administered by an algorithm? Robo-advisors continue to make inroads with savers, mainly targeting people who are not used to dealing with their investments.
Between two notifications sent by one of the many applications on a mobile phone, an alert, issued automatically: “Be careful, your investment will move away from your goal. Do you want to rebalance?»
After logging in, just a few clicks are enough to change the distribution of your savings, between euro funds, which are safer (made up mainly of bonds), and equity funds, which are riskier: the robot-advisor ( o “robo advisor») deals with more precise reassignment.
In June 2021, a report commissioned by the European Parliament defined the robo-advisor as “software operated by a financial intermediary. It is based on an algorithm and provided to customers online.»
It is aimed at the automation of financial management, which allows you to reduce costs and offer low fees.
In 2022 worldwide, more than 1,600 billion dollars will be managed by these robots, according to an estimate by the statistics portal Statista. A drop of water in the world of financial markets, but this proportion is growing rapidly: the importance was 300 billion dollars in 2017, and could rise to 3000 billion in 2026.
The solutions behind the term are many. This can be an additional digital tool to support customers, for example for banks: in June, Societe Generale generalized for its customers a “Financial coach» I offer them “arbitration tips» on their investments, via notifications, based on the positions of the bank’s analysts.
In its most advanced form, most often offered by 100% digital players, the robo-advisor performs the arbitrage itself and ensures the balance between the shares and the euro fund, according to a strategy defined in advance but that can be modified in any way. time
“Human advice is very good, but it is also expensive and not everyone has access to it»explains Marie Brière, director of the research department of the leading European fund manager Amundi.
As part of a scientific study, which has not yet been published, he carried out with Milo Bianchi, professor of finance at the Ecole d’Economia de Toulouse, a study on the use of robo-advisors in the context of savings employees between 2017 and 2018. using Amundi data.
They observed “better performance»of the order of 2.3% per year, of investments made in this way compared to employees who do not use it.
“The robot is able to induce larger portfolio changes on small investors, in terms of income and wealth, that is, precisely those who are less likely to receive traditional advice and participate in the stock market.»explains the article.
For example, it directs them more towards the equity market, which is more profitable than euro funds.
For robo-advisor designers, the goal is to “simplify the investment process»while providing access to the largest number of financial data, adds Guillaume Lesage, Chief Operating Officer of Amundi and in particular of the branch Amundi Technology.
They are better suited to long-term management than to investments aimed at quick gains on the financial markets.
Among private traders who have embarked on robo-advisors “some have returned because the strategy is very different from the personal management of their investments. It is much more passive» with investments such as ETFs (Exchange Traded Funds), designed to replicate the performance of an index, explains Kemo Konate, author of a memoir about people who have withdrawn their investment from robo-advisors.
“Companies need to be more clear in their promises»to avoid disappointment, I believe.
Le Revenu, with AFP