Many wealth managers are feeling the pressures caused by the innovations of fintech firms that have made personal investing less costly by way of robo-advisors. However, other financial experts say that it’s a concern for financial advisors who refuse to adapt and evolve along with the technological changes. Rather than do nothing but worry, financial services providers should embrace the technological changes and developments and use them to enhance their advantage over robo-advisors, which is that of being able to empathise with clients by taking into account their personal circumstances.
Modern robo-advisors are now available as budget-friendly tools that give consumers the capability to complete seeming complex tasks that they would otherwise entrust to financial advisor These tasks include retirement planning, tax-loss harvesting, and investment selection.
Actually, the technology isn’t really new since many human wealth managers have been utilizing such tools since the early 2000s. Generally known as automated portfolio allocation software they used to be affordable only to wealth managers who had the means to buy the technology. Until in 2008 fintechs developed similar tools as a form of a less costly financial investing software offered as a service that consumers can access online.
Robo-advisors are digital platforms that give clients investment services driven by algorithms but hardly have sophisticated human supervision. The lack makes the technology less attractive to others, particularly those looking for some kind of personal by considering in-depth information about their future plans.
How can Financial Advisors Remain Relevant Amidst the Changing Financial Services Industry
A lot of financial advisors are troubled that the rapid growth of free planning tools and robo-advisors will affect their businesses negatively. While there is a possibility that it would affect their business, it a possibility if they don’t add additional value to their practice of providing money management and basic financial planning services.
Basically, it is a financial advisor’s job to assist clients in designing their life ahead while shortening the learning process when making financial decisions. It is easy to buy a financial product or get information about financial topics such as insurance, taxes, IRAs, and similar personal investment products. Yet hiring a financial advisor lessens the need to analyze and research about the complexities of financial products, especially if there are new developments. i