With more than $1 billion in assets under management, Personal Capital sits among the trio of digital-first wealth management platforms pioneering change in the industry.

And even though traditional players such as Vanguard and more recently BlackRock have entered the robo advisor game, Bill Harris, the Redwood City, Calif.-based firm's co-founder and CEO, still sees room for even more growth.

"Remember how huge this marketplace is and how devoid of digital technology it has been," Harris tells ReinventWealth.

Harris, the former CEO of PayPal and Intuit, discusses technology-fueled change in the market and the trends in financial advice's digital transformation.

How do you regard technology's impact on wealth management?

I think the impact of consumer technology is going to ripple through the entire industry. Five, and certainly 10 years from now, the majority of people will be doing a lot of their work digitally. That's one dimension.

The other dimension is -- will there be a personal advisor? The answer is very much stratified. In the same way today where we've got self-service solutions and we've got advised solutions, we will have robo advisors for people whose finances are not terribly complex and then we'll have hybrid solutions, as ours is, for people who have complex financial lives.

If you look at the average user of our software, they've got 15 different financial accounts – far too many to keep track of by themselves. They need the ability to be able to pull all that information together and secondly the ability to be able to use smart technology to make sense of it.

We've got tools like asset allocation -- which is probably the most important thing for any long-term investor to be aware of -- but most people have no idea what their true asset allocation, particularly across all their investment accounts. They also have no idea what fees they're paying, and we've got fee analyzers to do that.

We have what we call the investment checkup, to take a look at what your current portfolio probably looks like -- whether it's efficient, whether you have single stock concentration, what the allocation is currently compared to target, and we are adding a retirement planner that allows you to take that current snapshot and project it for the rest of your life.

What do you make of about concerns that robos will make human advisors obsolete?

We believe that the best result comes from the combination of technology and advisors. That's the service we've built -- it's high-tech and high-touch. Great technology gets you a certain amount of the way and then human interaction helps to understand what the true needs and desires of the client are and then customize that service for an individual circumstance, whether it's a planning solution or the investment portfolio itself.

Some people are looking to buy a house. Some people are looking to pay for a college education. Some people have a small business. Some people want to retire early; we can work with people to take both the information we've got and the information we can glean from the client in order to customize the result.

Is the argument that you need to have that high-touch really just to comfort the people that are still providing that touch?

Money itself is quantitative, but that doesn’t mean that it's analytical -- it's highly emotional. And helping people make the right decisions is not just a matter of having the data; it's a matter of having the support. If you look at individual investors -- individual investors over time, there are many surveys and research around this, make the wrong decisions. They buy high and sell low. Why? Classic greed and fear.

So, having somebody that can help make the right decisions, and also help you make the right decisions in terms of the savings you do today in order to give you security in the future, those are things that humans can provide.

Let me give you another analogy. I started my financial technology career building TurboTax. TurboTax has been around for 20 years and all of the inputs can be made by an individual working on their own. There are still more people who have a tax preparer to prepare their return than use TurboTax or any of the competitors alone. Much of that is a matter of personal choice, of trust, and reliance.

Do you welcome the idea of bringing advice to a wider base of people?

Absolutely and we believe that's what we're doing. We're taking a sophisticated wealth management practice and making it available to a much broader audience.

Is something lost, though, in democratizing financial advice?

Let me suggest this -- that it's not in democratizing advice, but it's going to a completely automated solution where you lose the service, where you lose the customization. I think the robos and digital advice providers, such as Personal Capital, are both using technology to democratize the delivery of advice, but the question is, what kind of advice do you deliver? I would argue that the robo advisors are not true advisors.

We use tools to get an entire view of your net worth and then use that information to not only power the tools but also power your relationship with your advisor; we are using technology to democratize an entirely different level of service.

Among digital providers, who will achieve the critical scale that they need to remain sustainable?

I think the leading providers are likely to do exactly that. And certainly at Personal Capital, we’ve been growing 200% or greater for the past couple of years. We currently have $1.4 billion under management and we've got more revenue than any of the robo advisors.  

A number of the leading robo advisors will be successful and firms like Vanguard who are getting into this type of business will be successful as well. Remember how huge this marketplace is and how devoid of digital technology it has been. There's a big opportunity here. There is a tipping point where it all accelerates.

Personal Capital is riding three waves simultaneously. One is the move to virtual delivery rather than physical delivery, using the tools. The second is the move from high-cost active management to low-cost diversification. The third is the move from brokerage, and this is where Wall Street comes in, from traditional brokerage models where they're selling whatever makes them the most money rather than what makes you the most money to a true fiduciary.

Those three things together are what I think are driving the big change and certainly driving the growth that we've seen.

Has it not been emphasized enough how critical cost is in this whole revolution?

I think cost is relative to value provided. So, if you're really looking for the lowest cost; fine, go to Vanguard and buy an index. That is a reasonable solution for people with simple finances.

Once you start talking about people who have kids and are worried about the myriad of different obligations they've got and their savings and investments for the long term, that kind of broad view of finances is not something that can be delivered with a simple algorithm-driven basket of ETFs. 

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