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How Tech Sends Clients Running Back to Human FAs

January 3, 2018

Despite the proliferation of digital financial advice options, investors have actually become more reliant on traditional human advisors in recent years, according to a recent report cited by FA magazine.

While investors have been using digital tools as an entry into financial planning, they’re simply inundated by too much data and eventually turn to human advisors for help, Cerulli Associates says, according to the publication.

Nonetheless, investors’ appetite for digital advice isn’t subsiding: digital platforms were expected to reach $220 billion in client assets by the end 2017 and more than $600 billion by the end of 2022, according to the report cited by FA magazine.

Many advisors, meanwhile, have also embraced digital tools for managing their client relationships and optimizing their businesses, Cerulli says, according to the publication.

The future of wealth management will be a hybrid model in which digital tools help advisors automate and scale tasks such as portfolio rebalancing, leaving the advisors time to focus on essential activities such gathering assets, developing goals and talking clients through various scenarios, Scott Smith, a director at Cerulli, says in the report, according to FA magazine.

Advisors looking to take advantage of digital offerings to enhance their practices should be looking at options that offer both scalability and personalization, according to Smith, the publication writes. The platforms should allow enough flexibility for an advisor to serve clients across the spectrum, from those who never need to talk to a human to those who want a traditional advisor to handle all of their financial affairs, Smith says, according to FA magazine.

By Alex Padalka
  • To read the FA Magazine article cited in this story, click here.