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FAs Who Are Making Robo Tools Work for Them

By R.A. Monroe December 3, 2015

Robo-advisors are regularly presented as an existential threat to the traditional financial advisor.

But automated financial-planning tools aren’t always the enemy. In fact, many advisors are finding that robo systems can be valuable resources that supplement, rather than supplant, the services they provide to clients. When used strategically, robo tools can help advisors save time, and allow them to focus more of their attention on the parts of the job they do best.

Matt Cosgriff, a financial advisor with Minneapolis, Minn.-based BerganKDV Wealth Management, which manages $350 million, sees robo-investment platforms as a valued resource for scaling a practice, not threats to his brick-and-mortar existence.

Cosgriff’s firm is in the early stages of using robo tools such as Betterment’s Institutional offering to more efficiently bring young professionals — who don’t yet have sufficient assets to meet their traditional model’s minimums — on board as clients in an economically sustainable way. “Clients can now essentially onboard themselves,” Cosgriff says. “If all they want is investment management, then the train stops there — but if they are looking for more comprehensive planning, we’ve broken that piece of the service model out and clients can pay for that separately.”

BerganKDV has yet to incorporate robo technology into its mainstream wealth management, but Cosgriff expects it to happen. “At some point the technology will likely serve to make many of our processes more efficient,” he says. “But for now, it’s mostly a critical tool in scaling our model to work with young professionals.”

Tony Fiorillo, president of Indianapolis-based Asset Management Strategies, which manages $50 million, has been using robo tools for years. He uses GetRetirementReport.com to automate intake of information needed to produce reports, and eMoney’s emX software to produce the report for the client. He also uses conferencing software that lets him to link up with his clients’ computers. “More than half of our clients have never set foot in our office,” Fiorillo says. “They like the convenience of not having to deal with traffic, parking, weather and all that.”

But while such tools make planning more efficient for Fiorillo and his clients, they can’t entirely replace the human touch. “We’ve found that even though people are comfortable working over the phone and Internet, they’re not willing to work only that way,” he says. “They want to talk to the same person every time they call — someone who knows their situation intimately.”

Matt Cosgriff

As efficient as they may be, robo tools can’t replicate decades of experience, according to James Dowd, managing director of San Francisco-based North Capital, which manages $250 million for families and institutions. But that doesn’t mean such tools don’t have a place in helping clients achieve their goals. Earlier this year, North Capital launched Evisor.com, which offers clients a blend of in-person and digital wealth-management services.

North Capital uses Vanare, which “gave us all the features of a traditional wealth-management platform with the ease of a robo-advisor,” Dowd says. The firm’s clients can use the online tools to establish their financial goals, which are then combined with a customized behavioral risk questionnaire.

The result is an asset allocation based on North Capital’s proprietary investment approach. “That’s just one method we’re using to incorporate the human element into the complexities of online investing,” Dowd says. “Advisors don’t need to fear digital tools when those products incorporate that advisory underpinning.”