Robo-advisors introduced a new element into the client service model of professional advisors with easier onboarding and account opening services.
However, the benefit of that offering to DIY-oriented digital natives was offset by the huge costs of client acquisition. Today, the automated platforms with the most assets aren’t the disruptive startups, they’re the established firms.
By comparison, Betterment’s assets under management is just $10 billion while Wealthfront manages $6.7 billion.
Lon Dolber, CEO of American Portfolios Financial Services, winner in Division III of the 2017 Broker-Dealer of the Year, wonders what the long-term effect of automated services will be on the industry.
Read his comments below, and click here to see more from our discussion with this year’s winners.
Lon Dolber, American Portfolios Financial Services: Maybe the question is not whether [advisors] can open accounts. Maybe the bigger question is life at 100. Think about it.
I’m going to be speaking about this at our conference. I’m going to tell the advisors, “Baby boomers might live to 100. You better get your planning together because you’re going to have to plan for a longer retirement.”
Imagine having to manage money all in — when I say all in, [I mean] the cost, the underlying cost and what you make — under 100 basis points. Maybe we have to start from that.