Robo-advising will likely never take over wealth management, but there are certain elements it could replace. For example, tax-loss harvesting and digital account opening can be streamlined through technology and automation. Any tasks that serve as barriers to receiving services should be accomplished by machine. Financial advisors should instead do more of what they do best.
Customer engagement is key in banking, especially with the seemingly ongoing market turmoil. Old methods of communicating, such as calling and emailing on a one-off basis, are unsustainable. Automation and smart machines enable you to communicate with all customers quickly and personably, whether it’s through an email or a text message. It’s something all customers expect. Robo-advising can help provide better, more efficient communication methods, resulting in better customer service.
One particular area in which robo-advisors can make a positive impact is advisory services. With the high costs of advisory services and thresholds that enable one to obtain financial help, a massive portion of the investing population is being excluded.
Robo-advising isn’t just for people with lower assets than high-net-worth individuals. High-net-worth individuals are also showing interest in this technology because the fees aren’t as high, it’s easy to use, and it gives investors the feeling of more control than what they would probably feel with traditional wealth management firms.
While many believe that millennials are the best – if not the only – target for robo-advisors because of their lack of wealth, the data shows otherwise. FutureAdvisor reported that more than half its clients are over the age of 40. For Betterment, 25% of its business comes from customers over the age of 50. All age groups are interested in and choosing this service because of the convenience the technology brings to the table. In fact, many are going straight to digital investing tools, bypassing traditional wealth management institutions altogether.
To learn more about robo-advisors and the impact they’re having in financial services, fill out the form below or click here.
