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Friday, October 18, 2019

Robo vs. Advisor

 

 

robo-advisory platforms gained a lot of traction in the world of financial planning

 

In the past few years, robo-advisory platforms gained a lot of traction in the world of financial planning. The
first robo-advisory firms were launched in 2008 during the financial crisis
with new company Betterment in the vanguard of the new trend. The robo-advisors
became a new class of financial advisors who provided financial and investment
advice online with little to no human interaction at a very low cost in
comparison to traditional financial advice service provided by financial
advisers. The allure of low cost and easy to use service became popular among a
lot of people, especially among the young crowd who recently started on the
career path and have not yet accumulated a lot of assets. At first, this new trend
was not noticed much by financial advisors but with time more and more people
turned their faces toward robo-advisors. By the end of 2015, robo-advisers from
almost 100 companies around the globe were managing $60 billion assets of
clients and it is estimated that it will hit $2 trillion by the end of 2020.

Despite the fact that robo-advisory
attracts a lot of new business and new fintech companies who offer
robo-advisory services win new clients, the traditional advisory business with
the human touch will not go away. Advisors will always be needed because there
will be people who want to outsource work regardless of value for money. It is
especially true for more wealthy clients who need a custom approach to their
financial situation. Also, people with the diversified portfolio that includes
traditional and non-traditional assets like privet equity, real estate,
collectibles, luxury items, etc. will continue to have a need in the financial
professionals. Sucha clients will not blink at 1% in the management fee if the
benefits will provide them with the peace of mind and well designed financial
plan.

Also, the financial advisory firms can
offer a lot of customization in the service starting from selecting a good
prospect by qualifying them with a lengthy screening process as the Three
Bridge Wealth Advisors does which works with self-made and young high-net-worth
entrepreneurs. Then providing them with multiple specialized services like
private career coaching, medical care, access to employment legal counsel.
Detailed screening and hands-on practice allow the company to have the maximum
impact in building long term relationship with clients.

Advisory firms can offer diversity for
maximum client appeal. For example, some firms evenly split gender-wise and
hire young female CFPs to prepare for growth in the future. With more gender equality
in the workforce, females take key positions in the companies which make them
perfect prospects for financial planning. Accommodating their preferences will
play an important role in the growing financial advisory business. Another high
touch custom approach advisors can provide is diverse communication options. It
has been proven that mobile conversations are more engaging and much
appreciated by clients because they feel a direct connection with their advisor.

A simple phone call with the adviser can go
a long way. When someone needs advice or assurance no robo-advisor can
substitute a human experience. There is no doubt that those clients are not
looking only for good and affordable service but for a nice relationship with
their wealth.

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