After the Swiss lender shut and sold its SmartWealth business, the question arises as to how far can the robo-advisor trend go?

The decision announced last week by UBS to shut and sell SmartWealth, its robo-advisory service, raises questions about whether the drive to automate parts of this industry has hit a serious roadblock.

And by coincidence, this move coincided with a report by MyPrivateBanking Research that artificial intelligence technology and associated robo-advisory innovation had not yet eliminated the need for human contact in the wealth sector.

“In an increasingly tech-savvy industry, we believe there is still significant value in providing a face-to-face service for our clients and their families. Face-to-face interaction is the most effective way of developing relationships and building trust with clients, as well as being the best way to manage the complexities involved in managing wealth,” Guy Healey, head of private banking at Brown Shipley, said of the UBS move.

“While the development of robo-advice has yielded benefits for a small demographic, the overwhelming majority of private clients continue to place significant value on, and a preference for, face-to-face interaction with their advisors,” he said.

“Technology certainly plays a critical role in supporting a human-delivered service by providing greater and easier access to information for clients. However, we are of the strong belief that the future is a ‘hybrid’ model, where a combination of face-to face advice supported by technology will deliver most value to clients.

Large wealth management firms have been trying to broaden their operations with digital wealth managers that build portfolios of low-cost funds for retail investors. But they face an uphill struggle against established fund managers. Nutmeg, a robo-advisor founded in 2006, surpassed £1 billion ($1.3 billion) in funds under management for the first time in November — but the two largest fund managers, Cofunds and Hargreaves Lansdown, manage £96 billion and £86 bilion, respectively.

The Swiss giant launched SmartWealth in an attempt to broaden its appeal among retail consumers. Its minimum investment limit of £15,000 was low compared with UBS’s core wealth management business of high and ultra-high net worth individuals.

(Editor’s note: The industry is sometimes told it needs to be more digitally savvy and look at other sectors of the economy for ideas, but perhaps what this UBS move also suggests is that there are still valid reasons why private wealth management is still very much about individual managers and teams. Even below the higher reaches of wealth, people want to talk to a manager about their goals, asset allocation requirements and concerns about money. An algorithm will not suffice. It appears that for the time being, much of the focus on robo-advice will be on the “hybrid” models that blend human advice and technology, as the MPB report referenced above indicates. And this also means that some of the more apocalyptic predictions of humans losing jobs to robots and having nothing to do are fanciful, to put it mildly. UBS may also be disappointed in some ways about the outcome of this venture, but it was a speculative one and valuable information has been learned, which the Swiss bank will hopefully put to good use.)