Would you trust your investment to a robot? A growing army of ‘robo-advisers’ is offering an alternative to personal advice, which is seen as expensive, and to banks, who may not be trusted.

They are algorithm-based online platforms which use questionnaires and decision trees to assess your risk, then offer you an off-the-peg portfolio to match it.

In the US, robo-managers already control $19billion, and they are crossing the Atlantic.

Many of the big advice firms such as Tilney Bestinvest, Fidelity and Hargreaves Lansdown have already wheeled out their own robo-adviser.

Jason Hollands, managing director of Tilney Bestinvest says they suit investors who want “a flat-pack solution -- a kit with step-by-step instructions that they can follow that helps them obtain a sensible investment portfolio".

There are also newcomers such as Nutmeg, rPlan and Wealth Horizon which have attractive websites and offerings.

Nutmeg was recently named best online stocks and shares ISA provider in the YourMoney.com awards for the second year in a row.

Other new entrants to the market are MoneyFarm, Moneybox and eVestor, which have no minimum investment, along with Netwealth for anyone with £50,000 or more looking for a home.

For those happy to manage their money online but not confident enough to take investment decisions, the robo route ought to offer good value.

But robots do not make the big decisions that are always needed to steer ‘active’ investing, as opposed to the passive approach where funds merely track a market index.

Nutmeg demonstrated its active approach in June, when in the run-up to the EU referendum it sold European and Japanese shares, removed all exposure to the euro, and cut its holdings in corporate bonds denominated in sterling. Those big decisions will clearly affect returns - Netwealth for instance boasts the economist Gerard Lyons as its high-level adviser, while MoneyFarm says its investment strategy advisory team includes Nobel Prize winner Michael Spence.

MoneyFarm, which launched in the UK this year, says its most popular portfolio has performed sixth best out of 141 of its largest UK competitor funds, with model returns of 8.1per cent in the first half of 2016 against 3.2per cent for the competition and 4.2per cent for the FTSE-100.

Only six per cent of Scots say they have heard of robo-advice, according to a survey late last year by Nutmeg, which also found that investors north of the border are still more likely to consult an independent financial adviser than those in other parts of the UK (33 per cent compared to a national average of 28 per cent). Two-thirds said they would prefer face-to-face advice.

This month a study by the Prudential found only 17per cent of advisers believe that robo-advice will come to the rescue of “mass-market" customers who need some help.

Similarly, a survey earlier this year by Boring Money found that it is the more affluent who are more comfortable with trusting the robots. Fewer than one in five of savers with £10,000 to £25,000 said they were attracted by robo-advice, yet for those with six-figure funds up to £150,000 the proportion was four out of ten.

The Pru’s Paul Harrison said: “However, at Prudential we recognise that robo-advice could have a significant role to play in the future, in bringing a more limited form of advice or guidance to those people who either feel they don’t need an individual service from a professional adviser or can’t afford it."

Nutmeg’s founder Nick Hungerford says: “Scotland is in danger of falling behind because there's a lack of awareness about what online financial services can provide. With online tools, we can experiment and learn at our own pace without being charged by the hour. We can see what we lose in fees as a clear proportion of total return.”

Costs are not easy to compare. Tilney charges up to 0.4 per cent for the service, and from 1.47 to 1.59 per cent for its four risk-rated portfolios. Investors can also use a telephone helpline or online chat as part of the service.

Nutmeg charges one per cent of the investment though that reduces the more you put onto the platform, and has 10 portfolios to choose from.

Fidelity’s annual charges range from 0.25 to 1.5 per cent, plus a platform fee of 0.35 per cent, for its five fund options. But customers should watch out for those sneaky charges that bump up the cost of investing such as transaction fees, fund fees, custody fees and brokerage fees.

The regulator and the Treasury have suggested that the online services can help reach those reluctant to pay an adviser’s fee.

Meanwhile the old guard is fighting back. Barclays, Royal Bank of Scotland, Lloyds, Santander and Standard Life have all given warning that they will not stand idly by, but will launch their own robots. So banks will soon be re-entering the advice arena, which they abandoned when commissions were banned, with online offerings. That should really test whether robots can be trusted.

CASE STUDY

Ben Garnett, a structural engineer for an Aberdeen oil company, is glad to be avoiding deposit accounts for his monthly savings. “The way the money market is now, with the Bank of England cutting interest rates even more, it is pointless putting money in standard savings. I was looking for something extra.”

Garnett investigated online investment platforms and chose MoneyFarm. “There are a few, and you can potentially lose money as well, but if you invest for long enough in the stock market it should work.”

His answers to the risk questionnaire showed him to be a “fairly adventurous” investor, and this was rewarded in recent weeks when in a volatile market when his portfolio “went up by quite big margin”, Garnett says, adding: “It was good....you have an app on your phone where you can monitor it.”