Robots Can’t Invest Alone … And Neither Can Humans
“The debate about whether robos or human advisors will win is moot. The future of financial advice is bionic—a powerful combination of both.” – David Segal, Investopedia
During the past several years, the rise of the ‘robo-advisor’ has been swift, and new technology has dramatically altered the landscape of the investment industry. While the changes have presented significant challenges and concerns for advisors, we are now seeing new signs of a resurgence of good old ‘human power.’
Last week, Betterment, the largest robo-advisor, announced that it is adding human advice to their automated platform. It may be surprising that one of the loudest champions of the robo-advice movement has embraced human advice with their offering. However, this is a perceptive move by Betterment.
Financial planning is a business built on relationships, and one of the most common critiques of automated investment platforms is that there is no human touch to guide investors with their money. That’s starting to change.
Investors are looking for the low fees of online investing platforms, while still receiving that human touch of personal financial advice. According to last month’s survey by the Financial Planning Association and Investopedia, 40% of investors revealed that they prefer a hybrid digital-human solution.
Betterment has noted that it has long considered Schwab and Fidelity to be its primary competitors and knew that it would become more competitive with those brokerage firms These businesses feel the same way, as they have begun integrating digital advice platforms with the advice of financial advisors.
The investment landscape is constantly changing and evolving to adapt to use the best tools and processes available. There now appears to be an opportunity for robo-advisors to give consumers access to investment advice they previously would not have had. Likewise, now is also an opportunity for advisors to adopt new ‘robo’ technology to grow and strengthen their own practices.
It’s an exciting time of change and advancement in the investment and wealth management industries.
Will you lean in?