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How to hold 1,000 hands: Robo CEOs lay out a stark choice for traditional advisors at MarketCounsel Summit

RIAs who comfort themselves with the thought that automated advice caters to their 'non-core' clients are in for a rude shock

Author Guest Columnist Dave DeVoe December 15, 2014 at 4:53 AM
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Jon Stein: Efficiency is streamlined, but with human checks throughout the process.






Stephen Wershing

Stephen Wershing

December 15, 2014 — 1:50 PM

Advisors who provide financial planning advice have stronger value propositions today – tomorrow they will be the ones who survive. And to really thrive advisors will need to adopt robo-technologies for their back office. The AUM model is incredibly profitable and margins will decline because of competition from digital platforms. There are exciting times ahead for advisors who adopt new ideas and adapt their businesses and hard times for those who ignore them and stick by their old way of doing business. There is another good reference to this idea in your review of the discussion among the custodial chiefs and the reference to clients no longer wanting to sit in a meeting and review their statement – they want to review it standing on line for coffee. My additional thoughts here: http://www.theclientdrivenpractice.com/checklistblog/how-to-defeat-the-robo-advisor.html

Jeff Harrison

Jeff Harrison

March 27, 2015 — 9:50 PM

I wish there would be more discussion around how well these models serve clients. I expect that robos will move up-market over time and I do see them as a force that will change how we do business and a threat to the traditional model. But a very positive threat. Maybe they are showing us a better path, at least for some clients. Who are those clients? Perhaps those the traditional industry is not focused on. Or, maybe those who need a simpler solution. As the algorithms become increasingly sophisticated the robos will move upstream and hopefully change the discussion to what model will provide what client seqments with the highest quality and most appropriate advice. The robos biggest benefit may be that inform us as to the weaknesses of our current models.

We need to change the focus back to serving clients in the best possible ways. Focus on the costs and expenses of doing is important but serving clients needs to come first. If we do that I believe we will grow and become a strong industry.

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Mentioned in this article:

United Capital Financial Advisers
RIA Welcoming Breakaways
Top Executive: Joe Duran

Betterment, LLC
Financial Planning Software
Top Executive: Jon Stein

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