Blackrock, Under founder and chief executive Laurence D. Fink, has decided to do away with humans and embrace the machines.
Since it acquired the exchange-traded-fund (ETF) business from Barclays in 2009, the largest fund management company in the world, has faced a growing challenge.
The low cost, computer-driven funds have exploded exponentially, leaving in their wake the stock pickers who had been responsible for the original expansion of the firm.
Blackrock has now decided to calibrate its struggling stock-picking unit by cutting jobs, reorganising funds and lowering fees.
Fintech Eating Their Lunch
Without doubt the rise of passive investing, ETF's and index funds has transformed the investment world, providing investors with greater opportunities at lower fees.
Throw in the growing influence and savings through fintech initiatives and services and the pressure on even the globe's biggest money managers starts to bite.
Humans Leave Robots Arrive
Earlier this week according to a «Bloomberg» report, Blackrock laid out an ambitious plan to consolidate a large number of actively managed mutual funds that rely more on algorithms and models to pick stocks.
Blackrock said it would overhaul its actively managed equities business, cutting jobs, dropping fees and relying more on computers to pick stocks in a move that shows just how difficult it has now become for a man or a woman to not only beat the market, but keep their job.
