Robo-advisors are becoming the next big thing in financial services – and many RIAs see them as a benefit.
The 2015 Scottrade® Advisor Services RIA Study revealed 91 percent of RIAs say robo-advisors will become more prevalent in the next two years. That’s a substantial increase since a similar study in 2014, when only 50 percent of advisors surveyed said robo-advisors would become more prevalent in the next two years.*
And it seems RIAs intend to include these services as a component of their business. The study shows 47 percent of RIAs say they offer or plan to offer algorithmic-based investment advice to their clients during 2016.
RIAs who responded to the survey said young, low-asset investors would be the people most interested in robo-advisors. Some of these investors may soon become the clients you could be looking for – and your business could benefit.
“Offering these services could generate a natural pipeline to an advisor’s full set of services,” said Brian Stimpfl, senior vice president and head of Scottrade® Advisor Services. “Most RIAs are seeing millennials and certain Gen X clients coming to them to help grow their assets, and that could lead to a natural progression of helping these generations allocating to other areas.”
Stimpfl added that millennials are set to receive a huge transfer of wealth. The amount could be as high as $30 to $40 trillion, according to an article** published in Advisor Perspectives, a newsletter for financial professionals. This, coupled with potential loss of income, family planning and other one-off situations, places greater importance on personalized conversations with a financial advisor.
“There usually isn’t a one-size-fits-all answer,” Stimpfl continued. “Robo-advisors can benefit certain investors by providing choice, but face-to-face meetings are a great opportunity to demonstrate to millennials the value of establishing goals through conversation and personalized advice.”
Stimpfl concluded that the advisor who effectively combines personal service and the latest technology – the so-called “bionic” advisor – appears to be best positioned for present and future investors. He said “It’s up to advisors to understand how they can tailor their services to best help this growing population in saving for their goals.”
How do you help groom these investors to become clients? Scottrade® Advisor Services teamed with ActiFi, a coaching and consulting firm for RIAs, on a series of practice management education seminars in 2015. Scottrade® Advisor Services furthered the relationship this year with a series of practice management webinars designed to help you grow and succeed in your practice. Click here to listen to recordings from this webinar series.
* See 2014 Scottrade® Advisor Services RIA Study. Question wordings in both studies were identical; the 2015 study used a modified sample design. Percentages may not always add up to 100 percent because of rounding or the acceptance of multiple responses.
About the 2015 Scottrade® Advisor Services RIA Study: The 2015 Scottrade® Advisor Services RIA Study was conducted Aug. 3-18, 2015, in collaboration with Harris Poll, an independent third-party research firm not affiliated with Scottrade Financial Services, Inc., its business units or subsidiaries. The 373 Registered Investment Advisors were aged 18 and older and were employed at firms managing at least $10 million in assets under management. Percentages may not always add up to 100% because of rounding or the acceptance of multiple responses. This online survey is not based on a probability sample, and therefore, no estimate of theoretical sampling error can be calculated. For complete survey methodology, please contact firstname.lastname@example.org.
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**By clicking on this link, you understand you will be redirected to Advisor Perspectives, a third-party website operated and maintained by Advisor Perspectives. Scottrade and Advisor Perspectives are not affiliated. Advisor Perspective’s website contains information that may be of interest or use to the reader. Third-party websites, research and tools are from sources deemed reliable; however, Scottrade does not guarantee accuracy, completeness or timeliness of the information, is not responsible for statements, offers or products issued and makes no assurances with respect to the results to be obtained from their use. No information presented constitutes a recommendation by Scottrade or its affiliates to purchase any product or instrument discussed therein or engage in any specific strategy. Please research any product or service carefully before purchase.
Scottrade and ActiFi are not affiliated. This webinar is provided by ActiFi and is for educational purposes only. Scottrade and its affiliates were not involved in content development, do not endorse the content and are not responsible for such content. The information should not be considered a recommendation to buy, sell or hold any investment or an endorsement of a particular investment strategy. Investment decisions should be based solely on your own research, evaluation of the risks involved, your client’s financial circumstances and investment objectives.