An article caught my eye with this headline: “Turns Out Robots Don’t Offer Conflict-Free Advice Either”. I was surprised, because I never expected them to do so. You can read the full text of the article at this link, but it prompted me to outline the ways robo-advice is subject to conflicts (obviously) and ways bias can be present in design (also obviously) and how these could be managed with consumers in design:
If a product provider or advice business receives a payment for advice (from someone other than the client), or financial gain, which could simply be a saving, then they are subject to a conflict of interest. That need not be fatal to the provision of good advice – it simply needs to be managed. Of course, if a client has arrived and BigClever Financial’s website and uses their robo-advice tool to make a fund selection decision then they know that this is always recommending BigClever Financial’s products, add some disclosure about the difference in fees on the funds, and the client is at least armed with some information to consider alongside the recommendation. The same thing applies to tools which work out how much to save. Consumers have years of experience with vendors trying to up-sell them: from sweets at the check-out to vehicle dealerships. We can assume that they know the tool will suggest more, and have some tools to deal with that.
More insidious design issues arise when factors which might contribute to bias are less obvious. In the UK the Financial Services Authority identified a similar issue with comparison websites. They were worried that the comparison set could be carefully selected to make one product look particularly good. This has been seen with car rentals, hotels, and airline booking websites as well. Still less obvious is what the robo tool is doing with your information. Using it to work out suitability is a good thing. Using it to work out if you will pay more, perhaps less good.
We should always assume that, being built by humans, robo-advice tools are subject to the same conflicts as humans. They will need to be managed as such too.