Suleman Din

Robos can give ETF providers brand new channels to distribute products and access new investors, says Dodd Kittsley, head of ETF strategy and national accounts at Deutsche Asset & Wealth Management.

Fidelity has a new digital plan to work with advisors and is also developing a direct-to-consumer robo platform.

Robos don't have to be based on ETFs, says Naureen Hassan, head of Schwab's Intelligent Portfolios. "It can be mutual funds, individual securities -- whatever we want it to be, because it is a technology platform."

The hefty penalty is one result of an SEC investigation into performance claims of the AlphaSector ETF-linked strategy.

Officials should ask "whether these new robo advisors can be neatly placed within our existing laws," SEC commissioner says.

The decision to create rather than buy an existing digital platform spurred an emotional response from competitors, Schwab Chief Walt Bettinger tells attendees at its annual Impact conference.

The deal should be a signal to robo platforms they need to pair their technology with traditional advisors to remain competitive, analysts say.

To harness the full potential of new digital tools advisors have to train themselves in technology and avoid viewing it as just a bolt-on to their practice, says practice management expert Ray Sclafani.

First Round Capital has raised a half-billion in funds and invested in almost 500 companies, including Uber and Warby Parker. Co-founder Howard Morgan explains why it hasn't made any investments in robo advisors.

The automated investment trend is not a fad, says U.S. Trust President Keith Banks. But being firm in values and delivering value is still paramount, he says.