Robo advisors, who first set their stake in the ground as disruptors of traditional financial advisors, claim that technology alone could be used to deliver asset allocation solutions even to small accounts at an AUM fee of just 0.25%. In response, a number of industry commentators, and many financial advisors themselves, began to raise the question of whether the traditional 1% AUM fee would inevitably have to be cut to compete.
Yet the latest industry benchmarking data shows no sign at all that advisors are cutting their AUM fees to compete against robo advisors. In part, this may simply be because the consumers who work with robo advisors are more likely to be Do-It-Yourselfers anyway, and not the Delegators who are typically engaged with advisors.
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