How quickly do high-tech changes affect the financial advisory industry? If you were asked the question a couple of years ago, you could be forgiven for answering Not very. Broad cultural shifts seemed to be taking a long time to trickle down to planners daily practices; advisors might be streaming movies at home on Netflix, but theyd still send out paper statements and require manual signatures.
That seems to be, well, changing.
One big reason may be the arrival of the so-called robo advisors. In the last year and a half, theyve gained assets and attention; now theyre trying to shift consumer expectations for advisory fees and online delivery.
That effort seems to have struck fear into planners hearts at least gauging from the number of conference seminars and white papers Ive seen devoted to the battle against them.
But the real game changer, argues columnist Joel Bruckenstein who authors Financial Plannings annual Tech Survey analysis is not the robo business model, but the new technology these startups have developed.
That, I believe, is why youre seeing Schwab roll out a no-fee digital service of its own, and why Fidelity Institutional Wealth Service and TD Ameritrade Institutional partner with the online startups to offer white-label versions for advisors. Its also why advisory firms tell us theyre putting a renewed emphasis on comprehensive planning service (and software) that is, to differentiate themselves from online competitors and rationalize their higher fees.
Rapid shifts tend to produce surprising domino effects. The real truism is that if youre not paying attention, youll soon fall behind.
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