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Robo-advisors For Banks And Wealth Firms

As a CERTIFIED FINANCIAL PLANNER, our firm has embraced the robo-advisor movement and I believe it will continue to grow more so as an integrated tool than a replacement.

The robo-advisor technology is still in its early stages. So far we have been able to automate some basic functions of asset allocation, portfolio management, etc. simplifying the experience for investors while eliminating some of the pre-existent access barriers.

The future is bright for robos. Research by My Private Banking expects 10 percent of worldwide assets, or $16.3 trillion to be managed by hybrid robos by 2025.

Robo advisors are currently gaining customers rapidly and I foresee continued expansion, with independent providers getting acquired by large institutional banks as they go mainstream and replace financial advisors.

Robo-advisors are key to make retirement services and fiduciary advice more inclusive. The financial industry is shifting and technology-enabled businesses will thrive.

401k plans will benefit the most from automated tools as they can deliver customized and specific investment advice to participants at a lower cost than separately hiring a financial advisor.

The future of robo-advisors is being more aligned with people’s values. Not sacrificing returns, but also adding customization, simple proxy voting and more solutions for millennials to have their money working for their casues, 24/7.

Once seen as a means to democratize investing, it’s mainly becoming a tool for the banks. Soon to be outpaced by values driven offerings that provide more personalized, bespoke outcomes.

Robo technology is now table stakes. Every wealth manager that plans to stay in business must adopt robo technology. Bet against technology at your peril. Clients are demanding the elegance, simplicity, lower fees and tax benefits of robo.

What we are seeing now is a transition from user inputs and toggling settings in apps to a more holistic approach that uses AI to generate recommendations in chatbots.

For robo-advisors to evolve, robust due diligence is required. Human involvement will be necessary for the foreseeable future to enable investors to trust the data & for the ongoing oversight of algorithms and their accuracy.

Robo-advisory, combined with the move towards commoditizing the traditional brokerage services, gives way for the end-investors to step into this industry on their own, consuming the automatic services.