Robot advice can risk long-term savings as it is “less standardised” and not adapted to “individual needs and situations”, according to analysis by the Swedish Pensions Agency.

A review carried out by the agency found that there is a risk that long-term savings will have too low a risk and, therefore, too low an expected value development. It has concluded that for long-term pension savings, it is easier and cheaper for most people to invest in a global equity index fund with a low fee, than to use a robot adviser.

Robot advice is becoming more popular, with various forms of automated digital advice offered on saving in funds and equities. The Swedish Pensions Agency's survey shows that just over half a million people use or have used robot advice and a further 800,000 people may consider using robot advice. Half of those who use or have used a robot adviser have done so to save for retirement.

Commenting, Swedish Pensions Agency market analyst, Ann-Christin Meyerhöffer, said: “Robot advisers can certainly help savers to limit their choices on how to invest their money and spread the risks. It can be useful when retirement is approaching as it is appropriate to reduce the risk in your savings, but in long-term pension savings, it is both easier and cheaper for most people to invest their money in a global equity index fund with a maximum fee of 0.20 per cent.”

In particular, the agency stressed that the cost of robot advice can mount up, as there is usually a charge for the robot advice itself, then there are usually fees for the funds in which the savings are invested. Other costs such as brokerage and exchange costs may also occur.

The Swedish Pensions Agency's survey shows that three out of four people who use or have used a robot adviser do not know what they are paying for the robot. In addition, two out of three do not know what they are paying in management fees for the funds that the robot has recommended them to invest their money in.

“The fees are of great importance for how savings develop over time. It is therefore important to check what fees are charged when you let the robot adviser give investment proposals and manage your savings capital,” Swedish Pensions Agency pension expert, Monica Zettervall, said.

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