Raymond James plots a robo-free digital strategy
Raymond James envisions a digital strategy that doesn't have to include offering a robo advice option to clients.
"We will have technology but I don't think it will be a robo," CEO Paul Reilly told analysts during an earnings call Thursday. "We will have a technology that will help FAs gather assets."
The wealth management firm stands out in the industry for its stance against automated advice, which it deems as being in competition with human advisers.
"We've been very clear that we are not going to have a separate robo adviser that would disintermediate our existing advisers," Reilly said. "But we've never said that we wouldn't adopt new technologies that could help our advisers."
Like Raymond James, Morgan Stanley is also planning a digital advice strategy that does not feature a robo adviser.
Yet many competing wealth management firms and banks have been exploring how to profit from digital advice, actively investing in fintech, partnering with robo startups or launching their own digital advice platforms.
Earlier this year, RBC partnered with BlackRock's FutureAdvisor and UBS announced a deal with technology developer SigFig. Asset managers have also gotten into the automated advice market, including industry giants like Vanguard and Charles Schwab, which recently reported that its robo offerings — Schwab Intelligent Portfolios — passed $5 billion in AUM.
One motivation for firms to embrace digital advice has been the DoL's fiduciary rule. Some observers expect billions of low-account-balance IRA assets from clients to be discarded by full-service wealth management firms, and which could be gathered by low-cost robo advice providers.
Reilly told analysts he has his doubts about that.
"The question for robo advice is whether there was any advantage under the DoL rules to help with that. I'd say it's probably no, but it's not clear.”