Financial advice remains the purview of the traditional advisor and “robo” hype is merely catalyzing increased technology adoption among advisors, a study says.
“Robo advisors” do not provide advice and have therefore never really been a threat to the RIA space, says the chief executive of CLS Investments, Todd Clarke, describing the term as a “misnomer.”
The robo conversation is critically important to the industry, but perhaps not for the reasons one might assume, according to CLS, which has conducted a survey on the topic.
Despite concerns over the potential for “robos” to dilute the value of in-person financial advice, advisors are rising to what has been widely portrayed as a challenge by intensifying their focus on technology – they just need help with working out how much to invest and in what.
In fact, many firms are embracing the competitive pressure, which is in many ways good for the industry, Cerulli Associates noted earlier this month.
“The eRIA or robo-advisor business model presents the opportunity to bring technological upgrades to an industry hampered by legacy systems,” said Frederick Pickering, a research analyst. See more here.
However, advisors “only have so much time and budget to allocate to technology” and, given the blistering pace of change, client demand for digital solutions and services can “quickly seem overwhelming,” CLS said.