Robos have generated more articles and blog posts than they have assets under management. Depending on which article you read, if you are a financial advisor either the robos will crush you — like a Bradley fighting vehicle rolling over a walnut — or you have no more to fear from them than a five-star restaurant has to fear from McDonalds.

Both views are wrong.

To understand how robos will impact advisors, let’s put the robo offering under a microscope and see what they actually offer. First, there are two types: those that serve investors directly, and those that provide robo technology to advisors for use in their practices. There is some overlap between these two groups.

Second, great similarities exist between the services offered by direct-to-client robos and advisor-friendly robos. Both offer online client-engagement tools. With these tools, potential clients can enter information about their personal financial situation and preferences. Since robos have account-aggregation capabilities built into their sites, prospects can receive analysis of their actual portfolios even if assets are held at different institutions.

Robos use this analysis to recommend a portfolio to the prospective client. Direct-to-client robos typically recommend standard-issue, diversified portfolios built using the precepts of modern portfolio theory. These portfolios consist of exchange-traded funds or index funds and are managed on a strategic, buy-and-hold basis — although they may be rebalanced periodically. Some direct-to-client robos offer tax-managed portfolios.

Advisor-friendly robos have built their programs to incorporate portfolios designed and constructed by FAs. So, for example, an advisor who uses actively-managed mutual funds and a tactical asset-allocation approach can continue to offer those portfolios through their own white-labeled robo platform.

A prospect who wants to accept the recommended portfolio and open an account can do so in minutes using automated onboarding tools. Account-opening paperwork and asset transfers from another institution to fund the new account are handled without human intervention. Some advisor-friendly robos such as Jemstep have integrated offerings with popular customer-relationship-management systems like Salesforce and portfolio-accounting programs so new accounts autopopulate in these programs.

Once an account is opened, the new client can interact with the robo platform to access a host of services. Client-dashboard features allow clients to view their accounts, access performance reports, set up appointments with an advisor, initiate money transfers and even change addresses or beneficiaries on their account.

“So what’s the big deal?” you might ask. “Once you get past the Silicon Valley glitter and mystique there’s nothing new here. Advisors have had access to computerized client-profiling tools, risk-tolerance questionnaires and proposal generators for decades. There is nothing new about passively-managed, index-oriented portfolios. Sure, there might be some added convenience and efficiency in all this robo stuff, but so what?” You just answered your own question.

In fact, some robo offerings are pretty plain vanilla, if you look closely. But the added convenience and efficiency their technology offers are transformative in the same way online tools have been in other industries. Have you ever made a reservation at a hotel or a restaurant online? Ever bought a product through Amazon? The substance of the transaction did not change, but the online process made it simple and efficient.

Fear Itself

The advisor space may be a Johnny-come-lately, but robos are dragging it into the online world. In five years, most FAs will be using robo technology in their practices. Indeed, Business Insider reckons the robo market should hold roughly $255 billion in client assets in four years. Clients will appreciate the efficiency and cost savings that it brings to their businesses and the ability to take on new clients that could not be served profitably before. What they do won’t change, but how they do it will.

Direct-to-client robos can never replace the benefits of a face-to-face relationship. But that’s not the point. The world is changing rapidly, and online interactions are becoming far more prevalent. Older clients are becoming more conditioned to using the Internet for their day-to-day needs. They are being followed by a generation that is certainly very comfortable with the Internet and, in many cases, even prefers it to face-to-face interactions. Online interactions will not replace human interactions, but they can be used to supplement them.

Fear not: The current crop of direct-to-client robos will not crush you like a walnut. But their technology is being offered to your competitors — other financial advisors — by the advisor-friendly robos. They will use it to become more efficient and better serve their clients. You can neutralize the threat from direct-to-client robos and stay one step ahead of your competition by putting robo technology to work for your clients’ benefit in the near future.