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No Robo-Advisor Will Ever Truly Master Client Service

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We know robo-advisors who have set up shop in the wealth management industry aren’t going anywhere anytime soon. We’ve seen them grow in numbers, their assets reach formidable levels, and their client base become substantial.

But while we know these robo-advisors and other varieties of automated financial advice have made an indelible mark on our industry, we also know they’ve shown signs of recognizing the limitations of their role. Some robo-advisors have hired “human advisors” as part of a movement toward a hybrid model that acknowledges the need for digital platforms to retain at least some “traditional” services.

We know, as part of the traditional wealth management industry, that there is a complexity of client service that can never be replaced by technology. Few moments in wealth management history have demonstrated this more profoundly than the events of this past year, when investors tried to preserve and grow assets in the wake of a highly emotional presidential election, as equities reached all-time highs and the Federal Reserve advanced on its tightening cycle.

Here, we as financial advisors were called on to play a dual role. In one respect, we had to help investors be cognizant of how their views of the new administration might be tainting their view of the markets. Donald Trump’s election elicited intense emotions on both sides of the political spectrum. We need to approach clients with empathy — and then, tell them to put all emotions aside. While liberal and conservative clients may hear the same policies, they understand them very differently. The reality is, our political beliefs dramatically affect our financial outlook, and if we fail to eliminate emotion and focus on the facts, it could lead us to make damaging financial decisions. At the same time, we had to make sound financial decisions based on unexpected policy moves, unusual geopolitical risk, and rising interest rate fears the year has brought.

This duality of thinking and complexity of service is at the core of what we do. No automated service will be able to view a client’s life holistically and consider the emotions, family dynamics and life events that also influence an investor’s thinking. We help them decide not only whether they have enough money to retire, but whether they’ll be happy if they do. We gently intercede when overly generous parents want to gift money to demanding children before ensuring they have enough funds for their golden years. We help families broach difficult conversations on long-term care and transfer of assets when one parent starts to show signs of illness. We help people select beneficiaries, talk about college tuition, and make new lifestyle choices once emerging from peak earning years.

We know there are technologically savvy clients with their own financial acumen who don’t care to engage with people when it comes to wealth management advice. Much of what we do has little to do with the assets themselves. We know can’t offer the impersonal efficiency of a robo-advisor that some clients always prefer. But we also know there will always be clients who need much more than an algorithm.


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