Since the beginning of time – or, rather, the beginning of time for RIAs – financial advisors have faced competitive challenges, no different from any other industry. These challenges could come from discount brokerage firms, day traders, tax law changes or even softer challenges like keeping up with best practices – all of which pose separate threats that advisory firms eventually adapted to overcome.
The robo “threat” today is no different. In fact, just like all of the threats before it, the robo has caused advisors to think differently and strategically to carefully refine their business models to ensure that they will win — again. They have done this by utilizing a tool, typically developed by a third party, to add value to their clients as well as their firm. This approach does not have to be limited to technology.
Advisors hold a great amount of responsibility when it comes to the financial futures of their clients. However, the idea that an advisor should be the master of all trades, wearing a Super(wo)man emblem on their shirt, is just not realistic. Their ability to provide financial planning, portfolio management, insurance planning, tax planning and estate planning – confidently and as a fiduciary – will not be sustainable in the long run.