The benefits of robo-advisors are clear: trustworthy and affordable financial advice for everyone, regardless of net worth. Although some may debate what role robo-advising will play in wealth management, we’ve reached a point where it’s hard to imagine a world without it.
Ever since the evolution of the internet and the widespread adoption of digital devices, customer expectations have changed and continue to do so at a rapid pace. Today, convenience is a top customer priority. Many people either don’t want or are unable to spend the time it takes to visit a physical location or talk on the phone to manage their daily lives – including their wealth. Instead, they prefer to manage everything from the convenience of their homes or offices.
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For financial institutions to remain relevant in wealth management, they must adapt to the new digital times by transforming the way they operate. We’re seeing this digital transformation taking place now. Wealth management firms are partnering with, acquiring, and even building their own technology solutions to meet the increasing demand for a better customer experience that robo-advisors offer.
Human-to-human interaction is strong, and traditional wealth management services offer a sense of trust. If an investor goes to a financial advisor and asks where to invest, he or she will provide recommendations. Chances are, the client won’t question them. They’ll just choose what they like best.
However, digital technology such as robo-advisors also has the benefit of being transparent. These solutions will review all your clients’ assets, give them a complete view of where they stand and where they should be, and then provide a set of recommendations with reasons for each one.
While the vast majority of assets are still with traditional financial institutions, this is changing. More and more, individuals are leveraging robo-advisors due to their convenience, ease of use, affordability, and transparency. As people learn about their options with robo-advising, we will likely see that portion of the market grow.
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