News, Vision & Voice for the Advisory Community


Why legacy firms that buy robos in haste show no signs of urgency after they take title

Too much hustle and ambition can be as harmful as too little, according Jasen Yang's closely argued analysis

Author Guest Columnist Jasen Yang
September 1, 2016 at 10:30 PM
no description available
Jasen Yang: When 90% of financial institutions are 'figuring out our strategy,' the process is not working.

Related Moves

Fidelity will hire 4,000 staff in first half -- a staggering number but a tapering off from 'unprecedented' rate in 2021-2022 that catapulted it to 68,000 employees

The $10.3 trillion giant explains its hiring -- in a layoff environment -- as an RIA-like goal, namely having the human bandwidth to develop 'lifetime' relationships with its 40 million investors

February 17, 2023 at 2:49 AM

Wealthfront cedes to four years of investors clamoring for crypto by taking on expensive third-party vendor that Betterment rules out

The Redwood City, Calif., robo-advisor turned a hard 'no' into a soft 'yes' by dealing with Grayscale and its 200 basis-point-plus fees, which its robo rival in NYC -- also without a crypto path -- finds ludicrous.

August 14, 2021 at 2:20 AM

Fidelity Investments loses Kathleen Murphy who largely caught up Fido to Schwab (near $4T) on the retail side by reversing net promoter scores

The 'no whining allowed' leader of the Boston giant's retail business, who oversaw $2 trillion in net new assets, was ready to exit but hung in through a year dominated by COVID-19 challenges

January 23, 2021 at 2:02 AM

Second Betterment exec departs as new CEO Sarah Levy orients to her first month on the job and is confronted by personnel matters

Chief operating officer Dustin Lucien is the latest to leave the New York City robo-advisor, one of at least eight positions open as it prepares a push across multiple business lines to ignite growth.

January 19, 2021 at 6:32 PM

See more related moves

Mentioned in this article:

Portfolio Management System
Top Executive: Andy Rachleff

Betterment, LLC
Financial Planning Software
Top Executive: Jon Stein

Portfolio Management System
Top Executive: Anton Honikman

Will Trout

Will Trout

September 2, 2016 — 9:55 AM

Great article, Jasen. You’ve answered the question many people are asking: what happens when the independent robos end up in the belly of the beast? The answer, as you say, is not much. I think your point that “looser coordination between business units can be more efficient than more coordination” is well taken. Of course, most large financial corporations don’t work that way! The way I look at it, the real hitch for these companies in terms of adopting robo is realizing advice consistency across channels (rather than rolling out yet another digital channel)....perhaps more institutional flexibility will be the answer.

Lex Sokolin

Lex Sokolin

September 2, 2016 — 12:21 PM

Thoughtful piece. I think you are right that in a way, incumbents should (1) try to do less upfront and (2) do it faster. And indeed this is a cultural issue that is very hard to change. Industry should be launching more attempts, all compliant and discrete, and doing so without as much media pressure. Check out for example E-Trade’s roboadvisor or SoFi’s wealth management arm. These wasn’t as much navel gazing about those initiatives, now they are out, and time will tell how they adjust and change. The other point is that instead of shutting down, start-ups pivot. And they pivot a lot. So instead of shutting down an expensively-wound-up business unit if it doesn’t work according to a 5-year plan, incumbents should flex the resilience and evolution skillsets that entrepreneurs use to survive. Maybe that’s what ENV is doing?

Michael Hakerem

Michael Hakerem

September 11, 2016 — 12:51 AM
Great thoughts, Jasen! The true disruption will come only from a cultural shift away from manufacture and distribute (1:Many) to a client-centric (1:1) focus. The greatest financial innovations and solutions are arguably wasted due to the inefficient delivery and constraints of products and product delivery. Finance needs the mentality and fortitude to do something exponentially special as done when the human genome was mapped, 3D Printers used to enhance real lives, and organs transplanted. Still an opportunity when the award-winning FinTech innovators thrive on the mantra of "the greatest sales or prospecting tools ever," or can make their advisor client base seem clever because they can review a family's plan 10 minutes before the annual review and seem fully engaged. Jasen, I can hardly wait to see Polly's next contributions!

RIABiz Directory

The Industry Sourcebook for RIAs

   |    LISTING

RIABiz Directory sponsored by:

Directory Sponsor Logo