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What Advisors Can Learn From Robo-Advisors: Orion’s Clarke

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Robo-advisors create a “huge opportunity” for traditional advisors, according to Eric Clarke, president of Orion Advisor Services. In an interview at Schwab Impact on Wednesday, Clarke described some of the ways robo-advisors have set an example for traditional advisors to serve their clients.

Traditionally, advisors would hold an initial meeting with prospects, followed by perhaps several follow-up meetings just to open an account. “The robo-advisors have done a good job of showing the industry you can break down that barrier and just transact and do business online,” Clarke said.

The challenge to advisors now is they “have got to figure out how to make that process easier for their own business.”

Robo-advisors have also set a standard for efficiency. Clarke said that “advisors have got to make sure that their technology platforms are efficient — rebalancing, reporting — and make sure that their back office is running as efficiently as possible so they can compete and either lower their price point for those online investors or have a decent margin built in for their businesses.”

As consumers turn to the Internet for more and more — shopping, news, television, phone service — advisors may find even their traditional clients want to communicate and connect with them online. “Advisors have to figure out, ‘How am I going to securely email reports? Am I allowing clients to access reports through a web portal?’ A lot of advisors don’t have a portal that’s up and running and branded for their firm.”

Firms also need a branded mobile app. “Just creating those digital touchpoints is huge,” Clarke said.

This presents an opportunity for advisors, according to Clarke, because once they have those “pieces of the puzzle put together, then advisors can get out and not just market to their traditional client, but they can also attract that digital savvy investor as well as that next-generation, younger investor.”

Although big firms like Fidelity and Schwab have started a precedent of partnering with or building their own robo-advisors, Clarke suggested advisors who want to adopt some of the features of online advice providers begin with their current vendors

“Instead of just saying, ‘I’m going to give up 10 to 25 basis points and go out and do business with one of those models, it’s probably easier and more integrated with their technology workflows to go to those existing providers and say, ‘Can we examine the robo business model? This is where we have some gaps; what have you got to fill those gaps?’”

If they haven’t already, Clarke suggested advisors sign up with some of these robo-advisors to see what they’re all about and ask themselves, “‘Is this a landscape we want to compete in?’”

Even if they decide robo-advisors aren’t their competition, advisors would still do well to craft a strong mobile strategy.

“I don’t know about you, but it seems like I look at more websites on my mobile device than I do on my computer,” he said. “It’s a huge shift in the way that people are accessing information and account values, and most traditional websites look pretty awful on mobile devices.”

Consequently, advisors who are evaluating their mobile strategy need to look closely at how their website looks on smartphone or tablet. It should use responsive design so that no matter what kind of device a client or prospect is using, they can find what they’re looking for easily and quickly.

“Beyond the home page, your client portals have got to take responsive design into consideration so they resize depending on the type of device that you’re working with. Even having a mobile app is, I think, huge.”

Clarke said his firm sees 40% to 45% of Web traffic to his platform at a client level come from mobile devices.

Account values are “super popular” on mobile apps, Clarke said, but clients should also be able to drill down and see performance and positions. Current market commentary is “absolutely critical,” he said. “They want to know ‘How did the elections impact my portfolio? What’s your outlook on that?’”

Clarke has also seen a growing interest among clients in video market commentary. “What we’ve done is overlaid on market commentary videos the personal portfolio information, so when somebody logs in, they can not only see a video of the market commentary but they can also see their specific account values and portfolio information overlaid at the appropriate intervals in that video.”

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