Will Robo-Advisors Threaten the Future of Your Financial Services Business?

As a financial advisor, you rely on technology to do your job effectively, but it’s also a disruptor in the industry these days. Robo-advisors are a force to be reckoned with, offering automated services that provide low-cost advice. Are they turning financial advice into a commodity? Will you be priced out of the market? How can you compete with robo-advisors?

The key to renewing your value proposition in an environment of disruptive change is not to feel threatened by the rise of robo-advice, but to put technology to work for you and your clients. In fact, a recent article in Advisor.ca quotes Michael Kitces, director of wealth management at Pinnacle Advisory Group in Washington, D.C., who points out, “Cyborgs . . . human advisors who use technology . . . will be the ultimate winners of evolving advisory services.”

What does that really mean? Using technology to tackle your clients’ complex problems and explore alternatives for them frees you up to focus on higher-level innovative thinking, strategic financial planning, and to be focused on your customers’ needs and goals. Technology can help you to provide them with well-thought-out solutions and options more efficiently, but you can offer your clients so much more than that.

Quoted in a Financial Post article, Frank Kolimago, who heads up Vanguard’s Personal Advisory Service, points out that high-net-worth clients nearing retirement need more than a robo-service can provide: “Many of them were comfortable self-directing their investments while they were accumulating assets, but concluded that with the complexities of retirement it’s time to get some professional help.”

Your clients don’t come to you for the basic advice that robo-advisors supply; they are looking for creative solutions to complex financial issues. Your high-net-worth clients who are approaching retirement, own their own business or have a complicated family situation need more than routine advice. They seek an enduring relationship with a trusted advisor who develops deep knowledge about their situation, their family, their challenges and goals, and who can offer strategic advice and plans to address all of this in a holistic way, who can perhaps even be part of a multi-disciplinary team of advisors.

Nothing can replace the human touch when it comes to answering your clients’ big, complex questions. So shift the conversation from being just about the numbers, about beating the market averages with investments, to being about your clients, their personal goals and objectives. When you get personal and focused on your clients, you’ll add far more value than any robo-advisor ever could.

Additional Educational Resources:
Executive Business Builder Program
Executive Business Builders Network: LinkedIn Discussion Group

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