As a LinkedIn Influencer, Morningstar’s CEO Joe Mansueto wrote a piece on the future of robo-advice. Below are some of the observations he makes. To view them in detail, access the entire post here.
- Robo-advisers are good for the investment industry and here to stay.
They can step up to fill the advice gap and get people investing earlier in their careers.
- What impresses me is what robo-advisers have done with user engagement.
They’ve created compelling user interfaces that are written in a friendly, casual voice with clear explanations. They make investing more accessible and less intimidating.
- Robo-solutions work well for those early in their careers when their financial affairs are often simpler.
As people age, their financial lives inevitably become more complex. At that point, people highly value working with a financial adviser who can put together an appropriate financial plan.
- I don’t think pure robo-advisers will replace financial advisers any time soon.
The future of the financial adviser is secure and arguably more important than ever.
- There’s also the emotional and behavioral aspect to investing.
If the market plunges, investors often want to speak to someone. Logging on to a website and interacting with an online tool may not suffice.
- Both draw from each other.
Over time, robo-advisers may add financial planning capabilities with artificial intelligence features to enhance their appeal. We’ll see them evolve to hybrid solutions that incorporate licensed advisers into their solution via phone and video. One example of a robo-adviser doing this today is Personal Capital.
We’ll also see financial advisers use robo-tools to manage their smaller accounts. Instead of being harmed by technology, financial advisers can turn the tables and leverage it to expand their practices. We’ll increasingly see robo-technology built into adviser platforms and asset management firms offering robo-solutions to their distribution partners.
All of Joe Mansueto's posts as LinkedIn Influencer can be accessed here.
