Automation can benefit the entire lifecycle of a client relationship, Trout said.

The impending retirements of aging advisors, combined with the increased appetite for advice among millennials, will make automated advice services a necessity rather than a distinguishing feature, a Celent report predicts.

A 2014 report by Cerulli Associates found the average age of financial advisors is almost 51, and 43% are over 55.

In the Celent paper, “Gold at the End of the Rainbow,” William Trout wrote that as boomers retire from other industries, the “trend to superannuation also applies to firm advisors.” As they leave the industry, the pool of advisors available to serve clients will force firms’ hands toward automation.

“This dearth of advisors will mean that firms will be obligated to serve clients via automated channels, whether they like it or not,” according to the report.

Automated distribution of services provides advisors with an “easily deployed and cost-efficient alternative to the standard advisory model.” It also allows firms to serve clients “across the entire lifecycle, from prospecting and presales activity to long-term relationship maintenance.”

“One of the most attractive features of automated distribution is the client onboarding process, or even before that, the prospecting piece, which engages the prospect to actually provide the information and once he or she is interested in the service, it automatically on-boards them,” Trout told ThinkAdvisor on Wednesday.

He continued, “As you go deeper into the lifecycle, the whole process of digitization lends itself to real-time reporting, for example on a mobile device. It provides a digital footprint that enables cross-selling of products.”

He said that banks in particular struggle with cross-selling because their “information is siloed. They can’t sell investments to the mortgage client because they don’t know about the mortgage. [Automated delivery] enables management of information for cross-selling and an expansion of the relationship more generally.” Trout’s paper focused on the de-accumulation needs of clients as they enter retirement. He wrote that even when discussing de-accumulation strategies with clients is uncomfortable, it’s important to do so because many of their clients are boomers and thus facing an immediate need for it, especially in light of extended life spans and risks to programs like Social Security and pension plans.

“No longer can the advisor dodge de-accumulation issues because they provoke client anxiety, or are harder to monetize,” he wrote. However, “de-accumulation refers not just to the drawdown of assets in retirement, but to issues of downside protection and wealth transfer.”

Trout outlined the trajectory of investors’ lives after they stop working. In the early years of retirement, they’re enjoying more leisure time. However, “giddy” investors may make some bad choices and “investment and spending decisions taken in the early years of retirement tend to have a disproportionate effect on long-term outcomes.”

After a few years, retirees’ expenses become more moderate, but in their final years, health care and assisted living expenses increase.

“The span of retirement today can be as long as your career,” he said on Wednesday. “If you work 40 years and live another 40 years, the investment horizon is going to be a lot different from in our grandparents’ day when you had a few years and that was it after work.”

Trout stress that automation doesn’t replace advisors; in fact, it gives advisors more opportunity to connect with their clients. He said that many providers have become “estranged from the end customer in many ways.” For example, insurers more commonly sell to brokers than to retail consumers.

“If you agree or believe that proximity to the end customer translates into pricing power — because after all you own the relationship — then you really want to get back in front of that end consumer,” he said. “Digital distribution, in that it eliminates a lot of middle steps and intermediaries, enables that.”

Digital distribution also gives end clients a chance to actively engage because they’ve got a digital interface in front of them, Trout added. Face-to-face conversations can do that as well, but “they are much less scalable.”