Online propositions better for clients in a financial crisis than a traditional discretionary fund manager (DFM) according to Nutmeg.
Critics of robo-advice have suggested such propositions may not be able to cope with a financial crisis
Earlier this year Bank of England governor Mark Carney also said automated advice propositions posed a risk to financial markets in a downturn as they tend to 'herd' clients to particular investments.
At an event arranged by The Lang Cat entitled The Future of Robo-advice, Scalable Capital, Wealthify and Nutmeg defended their services.
Shaun Port (pictured), chief investment officer at Nutmeg, said: ‘We have more capability than most discretionary fund managers [DFMs]. Can a DFM change all of their client portfolios within a day? We could probably do it in an hour, and can run a million transactions in about a minute.’
Adam French, chief executive of Scalable Capital, added: ‘The way we manage portfolios is from the belief that you can’t predict returns, but the data shows us that you can predict risk, so using technology to forecast risk, you can start to make portfolio changes to de-risk people.’