Companies like Uber and Airbnb have grown exponentially by serving as high-tech middlemen to create efficient marketplaces that connect consumers with goods and services at greater speed and with greater value. Almost everyone has a smartphone. And Uber perfected a whole new way to use smartphones to instantly match the people who want rides with the people who want to drive them.

This new generation of automated platforms creates value by out-competing traditional incumbents—or outright disrupting an entire industry. As TechCrunch Contributor Sameer Patel writes in his recent article “In Defense of the Uberization of Everything,” a simple app successfully transformed an industry by cutting costs, complexity and bureaucracy to create more value for the end user.

Patel asks, “What would a brutally honest, stripped-down cost structure and operating version of your industry look like?” And this question is at the core of a transformation taking place in financial advice.


In fact, this transformation has been decades in the making. Ever since the advent of the internet, financial advice has been moving toward simplicity, transparency and greater value. Educated consumers expect it and demand it. Technology is the means to this end.

Does this mean advisers are becoming obsolete? Absolutely not. Hailing a driver, booking a vacation house — some would even say allocating a basic portfolio — may be considered a commodity that can be solved by a platform at a very low cost. But creating a comprehensive, personalized and holistic financial plan, to solve for a diverse range of underlying human wants and needs, over many decades or even many generations, is not easily automated and is anything but a commodity.

The uberization of financial advice is not the elimination of advisers. Instead, it is an industry-wide shift toward a successful integration of innovative platforms combined with guided advice.

Jefferson National’s second annual Advisor Authority shows that investors across all levels of wealth say top factors for selecting an adviser include personalized advice for a holistic financial plan and a fee-based fiduciary standard. Advisor Authority also shows that the most successful RIAs and fee-based advisers—those who earn more and mange more AUM—are more than twice as likely to leverage technology, combined with the guided advice, to provide comprehensive planning that is totally transparent and in their clients’ best interest.


Technology has been transforming every aspect of your clients’ financial lives, from banking and investing over recent decades, to mobile payments, lending and raising capital in recent years. Many creative platforms have emerged, to re-shape and even replace industry incumbents:

Traditional Banking vs. Online-Only Banking and Mobile Payments:
Branchless online banks can offer products that pay higher rates and charge lower fees. Twenty years ago at Telebank, we built the leading and largest internet bank based on the premise that consumers would “rather have the money.” Today, online banking is ubiquitous. And a new generation of mobile payment platforms are growing rapidly. But traditional banks can still provide valuable services from business lending to lines of credit to community reinvestment. And in many major cities, you can still find a bank branch on every other corner.

Traditional Brokerage vs. Online Brokerage:
The traditional model for buying and selling stocks was transformed decades ago through discount online brokerages such as E-Trade, TD Ameritrade, Scottrade and Schwab. These platforms have continued to evolve, such as during my years at E-Trade, when we launched a unified investing, cash management and lending solution. The newest platforms, such as Loyal3, are being designed as loyalty programs to help customers invest in the public companies that serve them, whether buying shares or even taking part in IPOs. New platforms like EquityZen have also been introduced to help investors buy shares of private companies.

Traditional Lenders vs. Peer-to-Peer Lenders:
First movers, such as Lending Club and Prosper, and newer entrants such as SoFi, currently have roughly $10 billion in peer-to-peer loans—a mere fraction of the multi-trillion-dollar lending industry. But as these platforms grow in popularity, PricewaterhouseCoopers estimates that peer-to-peer could increase more than ten-fold to a $150 billion industry over the next decade.

Traditional Asset Managers vs. Robo Advisers:
Betterment, Wealthfront, and Personal Capital offer lower fees and lower minimums for basic portfolio allocations. While these robo advisers currently control only $20 billion, a small slice of the multi-trillion dollar industry, they have become one of the hottest areas for venture capital and private equity. Likewise, many of the traditional brokerages and asset managers are buying the upstarts, or building their own digital advisory platforms. In many cases these are designed with RIAs, fee-based advisers and their high net worth clients in mind.

Traditional Capital Raising vs Crowdfunding:
Kickstarter, Indiegogo, GoFundMe, and a new wave of platforms such as SeedInvest and Fundable, are a unique source for raising capital, for everything from independent film makers to small business owners. And they produce tangible results. Pebble Smartwatch raised $10 million on Kickstarter when it launched in 2012, and an additional $20 million in 2015. The COOLEST Cooler, described as a “portable party,” raised over $13 million on Kickstarter in 2014, far surpassing the original $50,000 campaign goal.


The uberization of financial advice is already a reality. Technology has been a force for disruption in our industry, startups are marking milestones across a shifting landscape, and traditional incumbents are investing heavily in innovation. This has changed the way you and your clients approach almost every financial transaction. And in the process, created greater value.

Today, it is almost impossible to provide high touch without high tech. But nothing can replace guided advice. Comprehensive planning cannot be commoditized. Clients still want the human touch. According to this year’s Advisor Authority, only two out of ten investors are confident in robo advisers’ ability to manage and protect their portfolios in today’s volatile market. A full 19 percent are still unfamiliar with robo advisers altogether.

Even in an age dominated by the ease and convenience of an app for everything, Advisor Authority shows that investors are still more than twice as likely to choose phone calls and face-to-face meetings over digital communications such as email and text messages.

So, while your client might pull out their smart phone to call you when a volatile market gives them the jitters, or use an app to book a ride to your office for their annual meeting, they most certainly won’t rely on their smartphone to replace you anytime soon.

Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access