Do advisors need more than the human touch to combat the robo threat?
Even though robo-advisors are becoming increasingly popular, many advisors insist that clients will still seek a human touch or a real person who can understand the personal nuances of their financial lives. However, one consultant thinks that the threat from robos is not so easy to dismiss, reports Financial Advisor IQ.
Citing marketing consultant Marti Barletta, the article said that younger clients are looking for more transparency on the value they get and pay for, and they want some demand of on-demand, channel-agnostic to the information. In addition, there have been indications – most recently from UK market researcher Investment Trends – that older investors are starting to follow the younger generations’ lead in terms of expectations and technology adoption.
The possibility of a sharp stock-market downturn – which is very real, given that it’s been over eight years since the last one – adds to the risk of disaster for the industry. “Any one of these factors can break a market,” said Barletta. “Three at once is a perfect storm.”
Comparing advisors’ dismissal of robos with how online travel-booking services were regarded by brick-and-mortar tourist agencies – most of which have closed shop – Barletta said that advisors have to get their heads straight.
“They have to stop thinking it’s all about the personal touch and being liked and trusted — it’s not,” she said. “Most people are looking for services delivered on their terms.”
David Root, head of Pittsburgh-based D.B. Root and Company, favors a middle-ground approach. While changing client expectations and a growing taste for cheap robo-based services will displace many financial advisors with physical offices, he maintains that there will be room for hybrids. Particularly important are young financial advisors who can embrace new tools without giving up the personal touch.
“It comes down to a willingness to use technology to our advantage instead of fighting it,” said Root. “To me, the best practice of the future will be a harmonious marriage between a trusted advisor and a robo.”
Related stories:
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Citing marketing consultant Marti Barletta, the article said that younger clients are looking for more transparency on the value they get and pay for, and they want some demand of on-demand, channel-agnostic to the information. In addition, there have been indications – most recently from UK market researcher Investment Trends – that older investors are starting to follow the younger generations’ lead in terms of expectations and technology adoption.
The possibility of a sharp stock-market downturn – which is very real, given that it’s been over eight years since the last one – adds to the risk of disaster for the industry. “Any one of these factors can break a market,” said Barletta. “Three at once is a perfect storm.”
Comparing advisors’ dismissal of robos with how online travel-booking services were regarded by brick-and-mortar tourist agencies – most of which have closed shop – Barletta said that advisors have to get their heads straight.
“They have to stop thinking it’s all about the personal touch and being liked and trusted — it’s not,” she said. “Most people are looking for services delivered on their terms.”
David Root, head of Pittsburgh-based D.B. Root and Company, favors a middle-ground approach. While changing client expectations and a growing taste for cheap robo-based services will displace many financial advisors with physical offices, he maintains that there will be room for hybrids. Particularly important are young financial advisors who can embrace new tools without giving up the personal touch.
“It comes down to a willingness to use technology to our advantage instead of fighting it,” said Root. “To me, the best practice of the future will be a harmonious marriage between a trusted advisor and a robo.”
Related stories:
Toronto shines as major global fintech center
Wealthsimple announces new pricing structure
