Digital-first wealth management firms insist their technology and lack of legacy constraints help them deliver a user experience built for a new era of tech-savvy clients. At the same time, wealth management incumbents stress that their experience and resources give them the advantage in serving investors.

Both sides seem to agree, though, that there is much room to improve service for clients online.

"One of the black eyes for the financial services industry as a whole is its poor reputation in the customer service arena," says Matt Reiner, co-founder and CEO of Atlanta-based Wela, what was once a traditional financial planning firm established in 2008 and which began moving into the robo space about 18 months ago.

“My hope is that robos are bringing in new blood to the financial services industry and that what we as robos ultimately will represent is excellence in customer service, not just for us, but for everyone.”

Any number of wealth management leaders in the past year have hearkened to Amazon as the example of how the industry's digital client experience has to get better. Much of that energy has been focused on enhancing the look and interactivity of online websites. But the industry at large currently offers no definitive thoughts about how to adapt the traditional client service model to a digital realm.

It's a critical juncture, though; self-directed investors are expected to shift to online advice platforms as hybrid robo advice becomes cheaper, according to recent study by A.T. Kearney. That same report predicted that 20% of clients with over $1 million in assets would switch advisory models in the next five years.

"You'd better wrap digital around full service advice because investors expect it," said Uday Singh, a partner at A.T. Kearney.

To get to that outcome, automated investment services must first improve how they communicate to their customer what to expect when support is provided, says Bill Winterberg, founder of

"Some services tout their ability to offer support from a real person, but at the same time fail to clearly identify what kind of support customers can expect to receive," he says. "Very few, if any, automated investment services make licensed, registered investment advisers available by phone for actual advice interactions, instead only offering customer support for account related issues."

Riskalyze CEO Aaron Klein notes much of customer service for online is geared toward troubleshooting. (Klein kicked up dust at last year's T3 conference when he offhandedly critiqued the wait times that customers of robo advice platforms experience when they call for support.)

Online advice providers, he says, should at least offer multiple communication channels for clients.

"We offer telephone and e-mail support, but the most popular way to access our industry leading support team is live chat," he says. "You click the chat bubble in the corner of our screen and just start chatting with a rep. Our average response time is 28 seconds.”

Klein adds that at his portfolio and risk analysis firm, “a real human tries to respond to every customer and at least tell him or her, ‘Hey, we see this and we’re going to try to get you an answer ASAP.’ We continue to invest putting more and more reps on the phone, on e-mail, on live chat – because it’s our mission to make our clients look good to their clients.”

Betterment CEO Jon Stein, acknowledging some of the critiques of how Betterment communicated its decision to suspend trading in the morning after the Brexit vote, publicly said that the firm would look into adding additional notifications to its app.

The firm's spokesman, Joe Ziemer, adds that "we strive to delight customers and respond quickly," and is quick to point out that Betterment was named best in class in the online brokerage category by Consumer Reports magazine last year, along with USAA, which "says just how important we take customer service."

"What is customer service? To make sure our customers have a great experience, whether it’s in terms of doing basic research on us through an online chat or otherwise, rolling over an IRA paperlessly with us, or meeting any of their other needs," Ziemer says.

He does acknowledge there should be better industry expectations for putting full service online, but standards have to be defined first.

"Down the road you’ll see best practices, but not until there’s a clearer definition about what exactly a robo advisory firm means," Ziemer says. "Right now you can talk about any number of firms where people will say, 'That’s a robo adviser,' but the firm itself will not be, so we need to clarify definitions before the industry can get behind anything that might constitute best practices."

Klein sees more service standardization as traditional wealth management brands deepen their online presence. "That puts a lot of pressure on the companies that have been pretending to provide advice but really aren’t yet doing so," he says.

Winterberg also notes that "incumbent financial service providers have a greater ability to pay competitive salaries for customer service professionals as well as registered investment advisers. This puts robo advisory services in a challenging position: do they increase operating overhead to pay for competent and licensed customer service professionals and advisers, or control overhead by reducing customer service spending at the risk of failing to meet customer expectations."

It's a criticism that Wela's Reiner says digital-first firms must keep in mind.

“Before you make promises to anyone about customer service, either in writing or otherwise, you need to make sure that you can deliver what you promise,” he says. “And you must be able to ensure that you can do that within the pricing models that you have established for your company and your customer. You want to be able to make sure you can offer these promises without it being too much of a burden on your team, and I’m not sure we’re there yet.”

“Ultimately,” Reiner adds, “pricing may get them in the door but if we don’t provide great customer service our customers will be running out the door.”

Lawrence Richter Quinn

Lawrence Richter Quinn is an Atlanta-based freelance financial writer, who has written for The Washington Post, Financial Times, Investors' Business Daily, The Journal of Commerce and Compliance Week.