Investors have embraced robo-advisors and so should traditional financial advisors — after all, robos can help them expand their services to more clients and reach a new generation of investors, WealthManagement.com writes. But advisors must do so without diminishing the value of their own offerings, according to the publication.
Flexible Platforms and Transparency
Almost 90% of high-net-worth investors are willing to use robos, according to the World Wealth Report, WealthManagement.com writes. Those numbers drop off to 69% for investors between 30 and 39 and 43% for those between 40 and 49, but they nonetheless show robos’ popularity, according to the publication. And advisors who don’t dilute their value with a robo offering can position themselves for long-term growth, the publication writes.
For starters, it’s imperative that advisors offer a white-label platform consistent with their brand, WealthManagement.com writes. It’s just as important to offer a digital advice platform that aligns with the practice’s core values and investment philosophy, according to the publication. Advisors should work with a technology provider that can address both those needs, WealthManagement.com writes.
Advisors should also aim for a hybrid offering that still allows clients access to dedicated advice in times of uncertainty, according to the publication. And the availability of human advice should be clearly communicated to the clients, WealthManagement.com writes.
Likewise, traditional practices must be ready for clients whose financial planning needs become more complex with time and wealth accumulation, according to the publication. Clients must understand how they can transition from automated advice to more customized planning, and advisors need to be ready for that transition, WealthManagement.com writes.
Finally, advisors should aim for complete transparency in how their robos work as a way to show their own value, according to the publication. This starts with billing but should also include how the platform makes investment recommendations — and how those recommendations and allocation keep with the firm’s investment philosophy, WealthManagement.com writes.
Commentary on WealthManagement.com article by Gary Manguso
Posted by: The Wealth Advisor
