Monday, 23 April 2012

Computers taking over LloydsTSB / Scottish Widows Investment!

Interesting to read about Lloyds latest strategy for its Scottish Widows Investment arm in the following article: Lloyds sacks half of fund managers for robots.

Apparently the bank's Scottish Widows Investment Partnership, with some £143bn under management, is reducing its 38 fund managers to just 15 due to criticism about its poor returns and the high charges that come with investment in their funds.

What is the bank's strategy to improve this problem...., computerised, or "robot" funds!

The funds will now be managed from a single UK location and computers will be used to "manage" money (I assume between funds?) rather than buy and sell stocks and shares.

And, although clearly rationalising resource and reducing management costs to itself, LloydsTSB / Scottish Widows has yet to suggest that this might lead to a cut in charges to customers!

I can't speak for the company's performance but, given this article, I can say that it wouldn't inspire me or fill me with confidence to hold investments/pensions with them as I can only see "robot" funds responding to situations and more likely to follow the herd/peers in order to match "average" performance.
Its more than likely the case that one could invest in a tracker for lower charges and more transparent performance.

Certainly not for me but further underlines that the "professionals" can't always get it right.

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