“Are robos a threat to you?” asked Joel Bruckenstein, an advisor technology expert, during a pre-conference discussion on Monday at the Morningstar Investment Conference in Chicago.
While he said it depends on advisors’ business model and what their future plans are, he also addressed three specific areas in the industry that could be threatened by robo-advisors if they don’t act.
According to Bruckenstein, “a lot of mutual funds” are at-risk.
“If you think about balanced funds and target date funds, do they really give an individualized experience?” he said. “Or for the same money or less money, could an individual today go to a robo and get a more individualized portfolio and maybe a better user experience?”
Bruckenstein thinks there is both a threat and opportunity among indie advisors.
“To my mind, if you do nothing it is a threat to your business,” he said. “It may not be today but by the time you realize the threat and are able to act on it, it will probably be too late.”
While there is a threat, he also says there’s an opportunity for these advisors.
“Because you can have a better client experience, lower costs and you can reach out to new markets,” he said.