Need advice? Perhaps ask the robots

In an effort to stand out from the competition, the latest "robo-advice" product to come to the UK is waiving fees for customers investing less than £10,000 (and also for those investing more than £1m). Robo-advisers, online investment sites that give tailored advice to investors typically those with smaller savings pots are becoming increasingly popular as investors search for ways to cut the high costs of active wealth management.

MoneyFarm (MoneyFarm.com), an Italian start-up, will offer six different portfolios geared towards different risk appetites, which are established through algorithms and risk profiling. Investments over the £10,000 threshold will be charged at 0.6% a year, falling to 0.4% on amounts over £100,000 and 0% on amounts over £1m. Asset allocation will be overseen by the firm's investment committee and advisory board. By expanding into the UK market, MoneyFarm is the first robo-adviser to operate in more than one country, and has plans to extend further into Europe.

Clearly this is a little gimmicky an investor might start investing at the sub-£10,000 mark, but they're not going to stay that way if they're saving for a pension in the long run, for example. And while some expect free or low-priced investment guidance to become "more of the norm" in Europe, others are sceptical, says Aime Williams in the Financial Times. "When it comes to something that is not a taxi ride but investing and managing money, people won't always go for the cheap new brand," argues Mark Polson at consultancy Lang Cat Financial.

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It's true that fees have traditionally been horribly sticky in the UK financial industry. But increasing transparency and, indeed, the very existence of robo-advisers show that consumers have rapidly started to wise up. And competition already seems to be having an effect.

Nutmeg, probably the best-known robo-adviser in the UK, has already streamlined and cut its fees (admittedly not by much). Those putting in more than £1,000 will now pay 0.95%, down from 1.0%. This falls to 0.75% if investing more than £25,000 and 0.5% for more than £100,000. Several banks are also developing their own robo-advice products, including Barclays, RBS and Santander UK.

There could be advances to come some are already dismissing today's technology as "no longer exciting". "Conventional robo-advisers [consist] of little more than an automated advice service based on decision trees," says Philip Goffin of International Financial Data Services. Genuine artificial intelligence would give us "systems that learn from their interaction with clients". Sounds good, though we suspect it will also be used as an excuse to raise costs.

None of the robo-adviser services on offer yet have blown us away at MoneyWeek you could easily replicate their portfolios at home with a few exchange-traded funds and a bit of thought and it will be interesting to see how the market develops. But we do like them for what they represent a genuine shift in the financial services industry towards greater transparency, more competition, smart use of technology, and most importantly, a focus on costs.