What's the future of robo-advisors?

The robo-advisor market has exploded in recent years. The appeal is robo-advisors’ improving ability to provide valuable investment management with lower fees than live financial advisors. But is there a future where both co-exist? The CEO and co-founder of game-changing financial services firm SigFig weighs in during this fireside chat.

Transcription:

Chana Schoenberger: (00:07)

It was like a 30 second networking break, but you're done now. You've been here for two days. You met everybody you needed to meet right now. No, please keep networking. And I'm pretty sure that after this, there is a break with snacks or at least sodas, which will be next door. So you should definitely do that, so this is like a reprise of the celebrity death match that Mike and I had about a year ago, right. When I was running financial planning, we did basically this interview with a couple other folks talking about robo advisors and it's a year later and robo advisors aren't dead yet. So way to go.

Mike Sha: (00:45)

Well, yes, it's been quite a year in the tech markets. I know, the world is imploded like 17 times Robo advisor still doing still doing well.

Chana Schoenberger: (00:57)

Right? Never been against robots, I guess is the answer. So it's, it's been kind of a crazy week in crypto, but it's also been sort of a crazy couple of months in the regular, the normal Tradify markets, equities, everything recession, inflation, war, you name it how do robo advisors deal with all of this?

Mike Sha: (01:21)

Well, it's an interesting question. I mean, I think if you go back to the classic principles of robo advice, the idea of automated rebalancing getting properly diversified tax, less harvesting the volatility of the markets actually really highlight some of the benefits of having someone watching over your portfolio 24/7. And so I think in a lot of ways, when you think about the types of investors that are buying robo advice, working with advisors, they're generally long term oriented investors, they're saving for retirement over the long period of time. And at the end of the day, when you look at our inflows and outflows, we can track, the ratio of dollars coming in versus dollars coming out. And if you believe the headlines that like robo advisors don't do a good job, keeping people in their seats when the markets get bumpy, the data doesn't support that, like literally every single month from the beginning of the pandemic, till now up and down, every single month, more dollars coming in than going out. So, I think at that level things have gone well now, if you go to the self-directed side of the world Robin hood, people doing kind of discount free trading, all of that, I think they've seen a huge cyclical cycle come full circle. So, I think it matters kind of what your value prop is and the kinds of clients you attract. But, I think thankfully robo advisors have fared quite well.

Chana Schoenberger: (02:46)

I, feel very old because I think this is my fourth major downturn, I don't know, 20 years approximately working. Right? Not that long. So I started working just before the internet 1.0 bubble burst. And I started working in June of 99. And then of course, March of 2000 was the end of the NASDAQ. And, so it's always kind of adorable to talk to younger colleagues and younger people I know who are completely freaked out because they've never seen anything like this before. It's like, yeah this every single time.

Mike Sha: (03:18)

Well, that's the thing. I mean, when you look at self-directed trading, it is incredibly cyclical, when the markets are up, everyone feels like they're amazing stock pickers and it's all fun. And, it's, only all bets are good bets, but I think you always see that when markets turn, the retail investor who's managing their own portfolio tends to pull out, and not only do they pull out, but they disengage and, I think as many, many academics have proven, that's probably not what's good for you in the long term, and so, I think the more interesting observation is like, when you really look at the investment industry and all the dollars that exist in the world, yes, Robin hood and self director trading has seen a nice jump, but the vast, vast, vast majority of assets are managed assets, right? Not just through advisors, but the entire mutual fund industry, the entire ETF industry, the entire managed account industry, like almost all, assets out there are managed in some form or fashion. And I think that's because for most people investing is not really a hobby, it's a hobby when markets are up, but it's not really a hobby when markets are down. And, you generally see that, that discount brokerage trader, starts to kind of rethink things, when we hit kind of bumpy times.

Chana Schoenberger: (04:48)

Well, the discount brokerage trader often does not actually have the money to lose. So they, they realize that as it starts to go down and they pull it back, they don't have a choice.

Mike Sha: (04:57)

Yeah. And the other thing is, it's interesting. I was at Toronto earlier this year and they had some really interesting stats about the growth of discount brokerage and, discount broker has done really great over the last few years. But when you really think about the big players there, Schwab, Vanguard, fidelity, I don't think any one of those firms would consider themselves discount brokerage today they've all tried to move towards advice and solutions and, I mean, just think back a decade ago, talk to Chuck, that, that felt kind of controversial at the time, but it all makes sense now that, they were trying to reposition their brand to be more than trading. Right. And, I think that those, are all really smart moves that those those firms made. And I think it's been very good for their businesses.

Chana Schoenberger: (05:41)

So is there some sort of tech fix for robo advisors that wanna allow their clients to talk to someone when they're freaking out? Not so much to receive advice, but almost like a room mother kind of thing.

Mike Sha: (05:56)

Room mother yeah. I, think you'll hear some debate in the industry about, should that be AI in a bot or should that be a real human? it might sound sexier to like talk about the bot in the AI, but I actually think that the more likely, and the more common and the more accessible version of that is to talk to a real human, but, I think one of the most exciting things that's gonna happen in our industry in the next few years is that to be able to talk to that human does not mean you have to get in your car and like go meet with that person in person. It also doesn't mean that you call an 800 number and you hold the phone to your phone like this, you're not gonna have a voice conversation, like there's gonna be a really rich, immersive new kind of remote interaction model that allows you to access the value, add of being able to talk to an expert, but absolutely from the convenience of wherever you wanna be.

Chana Schoenberger: (07:00)

So just more generally, we've talked a bit about how robo advice has involved. What are some other innovations that you see coming down the pike for, wealth management for banking in general over the next few years, so much has changed in the last two years, in terms of automation, digitization, things going virtual in a way that really nobody thought was possible, just getting advisors to do DocuSign.

Mike Sha: (07:24)

Yeah. I mean, is this all when you really think about the early days of robo advice I think the origins of robo advice in that term was this idea of algorithmic asset management, essentially using software to manage portfolios. And, I think a big mantra at SIFI is that the idea that the service that the client is looking for is a portfolio management service is really becoming quickly outdated, the client is not just looking for portfolio management, right? They're looking for wealth management, they're looking for guidance, planning, advice, estate planning, tax, they want a full suite of, experiences. And so, to your question of, where some of the interesting innovation, I think one of the broader themes that we've been innovating around is this idea of integrated experiences. And there's at least three or four flavors of this that I think we're really excited about. One is, you know what I was saying before, it's not just about the managing a portfolio. It's about the whole experience around managing a client's wealth, a second is, what I would say is the integration between banking and wealth or financial services and wealth, for a lot of our partners, they're multifaceted financial institutions. They don't just offer investments. They don't just offer wealth management services. They have banking services, they have mortgage, they have lending, they have many different products, but unfortunately, they don't do a good job putting those all under one roof. They put 'em under one brand, but they don't really put it under one experience. And there's so much potential for that multifaceted financial institution to actually build a much better holistic experience. So, we think that there's a real opportunity to integrate banking, lending wealth, all into kind of insurance, all into one kind of integrated experience. That's built around the client's goals. Another example of this kind of idea of integration. I mean, our industry's been talking about the importance of guidance and advice and planning for a very, very long time. And I think we've always not quite gotten to the promise of it, even though we know it's so valuable to the client. And I think part of why we haven't is because we've thought of advice and planning as a siloed part of the experience. So you open an account, you do your account opening, you get it funded. They design a portfolio for you. And then your financial advisor pulls you aside and says, okay, great. Let's do financial planning now. And they whip out money guy pro, or they whip out E money, or they whip out some in-house built platform. They go through a really rich, deep exercise. They print out a 40 page PDF. That's like, here's your plan that no one ever reads. And then the plan goes back and sits on the shelf. Right, exactly, if you think about, what's learned in the plan, that's some of the most valuable insight, why is the client saving? Are they, seeing for retirement? Do they have kids? Do they have put through college? Are they trying to buy a home? And the entire client experience could actually be built around the insights gathered there, right. But, that's not how our industry works today, when you log into your account, you see your portfolio and your balances and your transactions, and you download tax statements. And even if you spent two hours with an advisor building a plan, there's like zero evidence of that. When you get your statement, when you log into your accounts it's sitting in that PDF that, money guy pro pumped out and that's, again, an opportunity to integrate, like where can you orient the whole client experience around what you know about why the client is actually investing instead of the assets that they hold or the portfolio that they manage. Yeah. And then maybe the last example of integrated experience is, some of what I was saying earlier about kind of the channel engagement. So today, if you're a client, you have an advisor, you may interact with them in person, in a branch, you may interact with someone on the phone, you may interact with the company's, mobile or website. And each of those experiences totally disconnected, like when you do something in the mobile lab, your advisor has no idea. If you do some work with your advisor, it doesn't reflect on the website, if you call the call center, like good luck that's even more disconnected than those other two experiences.

speaker 2: (11:51)

They have no idea who you are.

Mike Sha: (11:52)

Yeah. And we all live in like super fluid lives between, digital engagement, contact center engagement in person engagement, I almost didn't make it here today cuz my flight last night was canceled.

Chana Schoenberger: (12:05)

Which is the most analog thing ever. Right. Literally sit on a plane and then you go.

Mike Sha: (12:09)

But wasn't it nice that like as soon as the app was canceled, the mobile app told me that there was a button I could click to like, schedule a different flight when that didn't work. And I had to call the 800 number the person who picked up knew the phone that, I was calling from. And so, my file immediately came up, like it's not like airlines are amazing at client experience, but they've at least gotten some of that kind of omnichannel fluidity between kind of where you're interacting with them, they've made important progress in the last few years that's made flying infinitely less frustrating than it was, 10 years ago when you had to like wait in line, and wait for the counter agent to kind of help you deal with your with your travel.

Chana Schoenberger: (12:52)

Get your Sparrow coupon, cuz you're gonna be stuck in the airport for.

Mike Sha: (12:55)

Right. Yeah, exactly. So again I think that there's just so many opportunities to create much more integrated experiences for the client, and as you all know, we we're experiencing that everywhere in our life. So, why shouldn't financial services be any different?

Chana Schoenberger: (13:12)

So it's interesting. I think most of, at the beginning part of this week, we had our digital banking conference in Austin and which is sort of like a sister conference to this one, same industry, slightly different questions. But at, one point we had to meet the editor's breakfast round table and we had a number of bankers and financial service people in the room. We asked them what they're concerned about now. And this is one of the things that came up said, getting the branch experience is not really gonna change because the people who wanna go into a branch and access their bank and their wealth manager, that way, it's pretty much that population's really aging. There aren't a whole lot of 'em there aren't a whole lot of young people who wanna access it in that way by physically walking in and doing anything other than using the ATM, that's not happening anymore. But the difference is like they're thinking about online and mobile and call center. And a lot of these places have not really put any significant effort into online and now they could right over online and go to mobile because essentially all of gen Z and most of the millennials only ever use their phones. They never use computers. Computers are something you have to use in an office. And when you're not in an office and increasingly these days nobody's in an office, you just don't use a computer. You simply use your phone. So these bankers were grappling with the question of where do we invest so that people can have this seamless experience. And we also did a story a couple of months ago, one of the senior digital experience guys at bank of America was telling us that bank of America is now gonna have one app for everything, which sounds simple, but is actually completely revolutionary, right? An app for Merrill Lynch. That is also an app for the DDA customers. That is also an app for any sort of small business banking you do with them. So the app knows you, it knows your whole relationship with the bank, including wealth management, and you can manage everything from there, which has really never been done before at one of the big banks. So I think this is the direction that a number of them are going or trying to.

Mike Sha: (15:16)

Yeah. Now one thing that, I think is pretty interesting is we've been talking a lot about the fact that I think when you think about the world of banking before today, yes. We've been omnichannel for 20 years, right? We've had contact centers for a long time. We've had mobile apps for a long time, but I think the offering of what a client can do in each channel has been very distinct, you call the 800 number when you have a problem and you need to talk to someone right now.

Chana Schoenberger: (15:46)

You're already mad No one ever calls the 800 number, unless they're already mad.

Mike Sha: (15:49)

You use the mobile app when you basically need to do something pretty transactional, deposit a check, check your statement, transfer some money, pay a bill. You go to the branch either because your bank forces you to come into the branch. No, Or because, there's a real reason you wanna talk to someone, you wanna get advice, you wanna have that kind of richer interaction. And again, like it's, it's kind of strange that we like force our clients to kind of do certain things in certain places. Wouldn't it be better if in the mobile app, you could actually get advice. You could interact with a banker like why are we creating these big walls between how clients engage with us in certain channels? and again, I think that's part of where, we need to rethink what digital means. Digital is not just self-service, it's not just transactional. It's not just about, taking cost out. If we don't figure out how to have rich interactions with our clients digitally, we're gonna live in a world pretty soon where we're not having any rich interactions with our customers and that's not gonna be good for wallet chair. It's not gonna be good for stickiness. It's not gonna be good for differentiation. And, so that's part of, what needs to be in this next chapter of what digital means is how do we bring the richness of our firm, of our franchise, of our bankers, of our advisors, the richness of advice and planning all of these things that are actually truly part of where we add value to our clients, how do we bring that into these other channels that aren't in the branch?

Chana Schoenberger: (17:20)

Yeah, and it's interesting too, because a lot of it is generational, other it's also geography. If you're used to seeing a bank branch on every corner, then you're probably gonna have less of an antagonistic relationship with bank branches. You walk in, you use the ATM, maybe you withdraw something, get something notarized. You walk out again. If you live in a part of the country where they don't have a lot of bank branches, or of course, if you're a customer of one of the many new neobanks challenger banks, digital first banks, they're just are no branches at all. And that's simply how you do it.

Mike Sha: (17:53)

You know, geography's really interesting because, you look at a typical bank and I'd say there's three kinds of physical locations, one is like the metropolitan branch wealthy place, high customer concentration, every service provider you'd imagine would be in the branch five days a week. Then you've got the let's call it the suburban branch, you know where, there's not quite as large branch, not quite as heavily staffed, lots of parking, and then you have the rural branch, which, is maybe there for community reinvestment. It's, it's maybe there, because the bank doesn't wanna pull out of a market because that has community impacts and kind of local brand impacts, but what you really find is that in those suburban and most, most of the rural branches, you have very thin coverage of high quality specialists. So the financial advisor is traveling between five different branches, 1 day, a week in each branch, the mortgage loan officers kind of same thing. There might not even be a small business banker because there's just not enough, clients there. And when you think about inclusion, that's a huge gap. But when you think about a world where you can interact with these specialists remotely, suddenly we've leveled the playing field, you can live off somewhere, that's not near a branch and have access to a small business banker, a financial advisor, whatever it is. And, that's gonna be a huge opportunity, like one of the brands that's probably in the room, Edward Jones, they've done an amazing job being in like every small town in the country they bid a huge franchise and, they don't have a lot of competition in the towns that they're in, but you think about a future where there's really rich remote interactions and suddenly I bet most of your firms could compete in those places. So, I think it's just, there's so many transformational unlocks that are com gonna come as a result of being able to access the value of humans without the physical proximity of the human being in front of you.

Chana Schoenberger: (20:05)

So the converse to that, the anti-tech away to do it. We did a story a couple of months ago about a bank called bank of burden hand, burden hand is a town in Pennsylvania, and it is, this bank serves a heavily Mennonite and Amish population. And they had to meet their customers where they were and where they were is it's too far for them to come to the local branches in their horses. And buggies, obviously smartphone banking is completely off the table. And so they outfitted this bus, they call it the guilt bus, right. Guilt means money. And it's basically a mobile branch with an ATM and some bankers inside. And they go to like market crossings. And, there was, we ran a picture of like the customers all lined outside this bus in an orderly fashion waiting to do their banking. And this is how they access banking services. And it was actually really interesting because it's 2022, you wouldn't expect this sort of thing would be necessary, but this population is not interested in a fully digital solution. Different.

Mike Sha: (21:05)

I probably wouldn't be building a bank that way, but Nope. But, I think to tie it together, there is this one theme that we think is really fascinating, which is it's hard to deliver. Good advice, I think we know that, at the ultra high net worth high net worth segment, we have really great advisors who are really sophisticated at the more retail and mass affluent segment. We don't always access the same talent pools. Right. And so part of, I think, making this transformation to, how do you bring high quality advice to more people? I think one of the things that we're gonna start to see is more specialization in the advice that's actually offered. So when you think about if you're a big bank and you run a network of a thousand branches and you have 5,000 bankers in those branches, those bankers have an impossible job, they have to be able to handle any client coming in for any need and be expected to try to give good advice and be expected to stay out of compliance trouble, like there's so many different situations that you have to deal with that it's very hard to be good at it all. And then you think about the talent pool we're pulling from, or the average retail banker or the average, kind of starting financial advisor. Not necessarily people who have had decades of experience in the industry, those experienced people are saved for wealthy people. And so, how does this tie back to kind of like specialization or remote advice? One of the things you're gonna start to see is as big firms start to offer more remote, specialists, those specialists can become more specialized.

speaker 2: (22:46)

So, that's the center of excellence model.

Mike Sha: (22:48)

Exactly. So you might have a team of advisors who works with a certain kind of client. You might have a team of advisors who work at a certain moment in life. people who deal with clients, going through marriage or divorce, people who just had a kid, people who just sold a business, you couldn't have an expert who specializes in clients who just sold a business in every branch that you have, but you could probably have five of them across your firm that can work with clients who are, throughout the country and so suddenly you can actually increase the quality of the advice and guidance and planning that you're offering, because the people giving that advice can serve a much bigger audience of people.

Chana Schoenberger: (23:30)

So I'm sure you all were here for the Kelly Kio session. Yeah. This morning where Kelly got up and said among other interesting things that she, thinks that human advisors and robo advisors will always have to coexist because they serve different things, but clients need both of them. What do you think?

Mike Sha: (23:52)

Yeah. So I think I take a similar point of view, but different. So I think it's less that, there will always be robo advisors and there will always be human advisors. That is true. I agree with that. They will coexist, I didn't hear exactly how she described it, but the way I think of it is actually that, when you think about the future advice model, it's not about being on one end of this spectrum or the other, it's not about being fully digital or fully human. All of the richness will happen in the middle, everything will be the most interesting stuff will be the combination of human and digital. And there's not gonna be one combination. There's gonna be lots of flavors of it, you're gonna have a high net worth FA who's mostly meeting you in person, but has a much better digital experience. You're gonna have a mostly automated service, but, there's an emergency 800 number you can call if you really have a need and you're gonna have a lot in the middle that's call it mass affluent and affluent. You're wealthy enough that you should have some sort of financial planning experience with an advisor, but you're not so wealthy that they're gonna act as concierge for you, so I think for me, it's more about how do we mix human and technology in interesting ways yeah. To deliver on, a certain client segment or certain client need. But I think almost all the assets that will be managed will be in a mixed model, it's not gonna be pure human or pure software. I mean, how much of your life is like pure in person or pure digital? probably the pure digital part is growing, but you look at all the big, huge firms, apple, Amazon, Google, whatever it is none of those firms think of themselves as pure digital, right? Like they're all

Chana Schoenberger: (25:39)

Uber, right. Uber's an app, but it eventually a driver has to show up and drive you somewhere.

Mike Sha: (25:47)

So, I think part of what'll be interesting is like, does their emerge pretty discrete versions of how those get mixed? We're starting to see certain patterns like, I think we're seeing growth in like a centralized context center based service model five, six years ago, there were a few firms doing it. I'd say today, there are a lot more firms doing that. So that's kind of a pattern, I think we are seeing the kind of virtual engagement like that, part of what was unique about the pandemic is it was one of those moments where advisor expectation and client expectation were moving at the exact same pace in sync, a lot of times you like clients are ready for the next thing, but advisor behavior is really hard to change. So like, they're not quite there yet or advisors want something, but the client doesn't want that yet. And so part of the magic of really powerful movements in our industry is when both sets of constituents move at the same time. And I think that the pandemic afforded us this kind of unique moment where everybody suddenly realized like, yeah, the physical nature of our business can change. And that's probably good for all of us.

Chana Schoenberger: (26:58)

Yeah, one of the most encouraging thing for the them in the pandemic for me, was talking to advisors and listening to discuss how, they found video calls so helpful for multi-generational meetings. And this of course has been a big problem. Advisors have always had, we've talked about it on a number of sessions today, this morning we had the gentleman from careful talking about, how important it is to understand not just your senior clients, but their children and grandchildren, because this is really where advisors are going, but advisors have had a very hard time doing that. The stat that came up with 90% of errors will choose a different advisor. And not use the advisor that the original person was using, which is a huge problem for advisors because you don't want 90% of your client book to walk away. So now you can do a video meeting where you get the three generations of the family and anyone else who needs to be there and they don't have to be in the same place. So you don't have to get everyone to fly to Florida and sit in grandma's living room so that the advisor can come over and give a presentation that with the 40 page PDF, no one's gonna read. Instead, you can do a much more interesting presentation that the grandkids watch on their iPads, the grown kids watch from their offices and grandma's still in the living room.

Mike Sha: (28:13)

Okay. So take the example you just gave, which is a perfect one of like how the world's gonna change. But if we fast forward two more years, here's, what's where I think it's all going, you mentioned presentation, you mentioned video a lot of people assume that remote engagement is video conferencing. That is just scratching the surface of what remote interactions will really be. We think the future is gonna be interactive. Immersive. It's gonna be not just about video. It's gonna be about doing things together with the client. It's gonna be about collaboration. And so instead of thinking about it as oh, financial advisor would really love to get to know the kids, cuz that, that's the way to try to hold onto those assets. When the (28:55) pass their money on, that client, that kid probably doesn't wanna sit there and watch a presentation from the advisor. Who's like their parents' advisor who they've never met before. Right. Wouldn't it be better if the advisor could actually facilitate a conversation where they hear about the parents' principles around their money, they hear about their kids' principles about their money. They run an exercise where we ask the same questions. How do you feel about this or that scale? This one to five, like it's interactive, we learn about both sides and then we show you how you compare. So we say, oh, it's interesting. Your parents care a lot more about this. You don't seem to, do you guys wanna talk about that? You know? Right. And, so, I think sometimes our job as advisors is sometimes being that kind of like family, therapist, family, coach, like, whatever you wanna call it, you're not just managing the portfolio. You're actually helping to like build the strength of the dynamic in the family. And that's where it's not just like, let's watch the FA do a presentation to the kids. Let's actually do an exercise together. Let's collaborate together. I think that's where remote engagement will go because it's, it's not just about the video conferencing.

Chana Schoenberger: (30:08)

Let's talk about how one of the children is very interested in using their inheritance to buy a house while the other one wants to start a foundation, or one of them wants to save the whales. The other one wants to think we should, I don't know, gun control or some other issue.

Mike Sha: (30:22)

Yeah. I don't know if any of you like we have a lot of team members remote and you know, in the early days of the pandemic we're really thinking about like, how do we get team members to bond? Like they're not seeing each other in person anymore,

Chana Schoenberger: (30:32)

The dreaded happy hour on zoom.

Mike Sha: (30:34)

Yeah, exactly. You're all like drinking by yourself.

speaker 2: (30:38)

We don't do it anymore.

Mike Sha: (30:40)

One of the things that, I think people loved they have these like interactive games online, and you actually play a game together with your coworkers and it's like the game that brings the people together, you know? And, so, again, I think we're all looking for those experiences that feel kind of fun and engaging, even if you're not there together in person, and same thing with advice, like I think there's, there's gonna be kind of a modern state of what financial planning and advice feels like, that is not, cash flow forecasting and let's look at your balance sheet and let's run a Monte Carlo simulation about the likelihood that you reach a certain event. I think those were experiences designed with like the math and the science in mind and not necessarily with the client and the client need in mind. So if you kind of reimagine financial advice and financial planning around well what's, how does the client think about their own money and how do we speak to the client and the language that resonates with them? I bet a lot of our planning and advice experiences would look pretty different.

Chana Schoenberger: (31:48)

Yeah. It'd be interesting. If you could do that in a situation like the markets we have today, where you have a lot of people are concerned that they very carefully, if they were smart, they've very carefully gone over their goals. They understand what their goals are, what they're investing for, and now it, they might feel like those goals are not in reach or they might be pushed out farther. And then there has to be a human or at least a bot that can tell them not to freak out. Things are gonna be okay. You can still retire. You can still have that boat sometime down the line.

Mike Sha: (32:19)

Yeah, Or maybe translate what's changed in the language of their goal. Right. So, yeah. Okay. Markets are down your portfolio's down 15%. instead of leaving that client in a state of anxiety, it might turn out that, since you're 32 years old, the main difference is you might have to work, a year longer, right. Cuz it's compounding over a long period of time or maybe, because you're saving over the next 30 years, you just need to increase your monthly contribution by half a percent and you get there. Right. So, that takes anxiety and turns it into understanding and action, and again, like our role as advisors is to help people take the right actions. Like my guess is that's the vast majority of the value that we add as an industry is, getting our clients to do the right things. So, I think there's a long way to go, definitely for digital advisors to help do that. But even for traditional advisors there's so many advisors who fancy themselves as portfolio managers and well, I'm really good at predicting the future and, I've got this great portfolio that's performed really well over the last five years and so on and so forth, I think we all know the data doesn't really support that. That's where our advisors add value.

Chana Schoenberger: (33:38)

If You could predict the future, you should not be advising clients. You should just go start your own hedge fund.

Mike Sha: (33:43)

So, I think that is an opportunity where, digital and technology can actually help be an agent of the behavior change for our advisors. You know, that helps them rethink the way they run their practice, the value add that they do, for their clients.

Chana Schoenberger: (34:02)

So we only have time for one more thought, do you have any final thoughts? Where do you think robo advisors will be as a percentage of the market of managed assets in say five years?

Mike Sha: (34:13)

Well, we've been saying for a long time and like, what do you count as robo advice? like if you think about robo advice as like the classic original digital only advisors, I think very, very, very small. If you think about robo advice as like firms that use software to help improve the wealth management offerings that they offer,

Chana Schoenberger: (34:33)

It's like a hundred percent.

Mike Sha: (34:34)

It's like a hundred percent. Right. Exactly. So, if you, if you think back to the early days of like internet banking in 1999, right? Like those early internet banks, like how many of those exist around today? almost none of them.

Chana Schoenberger: (34:48)

Capital one is still here.

Mike Sha: (34:49)

But how many traditional, financial institutions are digital, a hundred percent of them are. Right. So, I think by that kind of question, yeah. I think, it's like impossible to imagine a world where, digital and technology doesn't play even more significant role than it does today in the wealth management industry, I think the question is more, Like how do you think about, where that technology adds the most value? and I think that's where, I mean, there's so many horizons that are being, opened up on what digital wealth management really means. So it's a super exciting time like five years ago, if we did this talk, we'd be talking about robo advice and algorithms and stuff like tax off harvesting, in mid today we're talking about financial advice, financial planning needs discovery, remote engagement. And, again, like let's not let ourselves get into a world where like we've got one vendor that does this and one vendor that does that. And like none of the systems really talk to each other because that'll lead to just more siloed experiences that don't make any sense to our clients.

Chana Schoenberger: (36:05)

Great. Well, thank you so much, Mike. I really appreciate it. Always fun to talk to you. Thanks for coming out.