Advisors should be concerned about robo-advisor platforms, Pershing Advisor Solutions CEO Mark Tibergien told WealthManagement.com. The digital advice platforms have the threat of “disintermediating their business and doing it at a lower cost,” Tibergien said at the custody/clearing firm’s annual INSITE conference in Orlando, Fla.
At the same time, advisors shouldn’t be panicked about these platforms because there are ways to leverage digital technology in conjunction with traditional advice delivery methods.
“One thing we know is the way people access information, conduct their business and elicit information for themselves is all going to be digital if it isn’t already. So it’s a question of whether [advisors] want to be contemporary and relevant as those clients mature,” Tibergien says.
According to research released Wednesday, about 27 percent of advisors surveyed by Pershing said they believed digital advice to be irrelevant to their practice. But about another quarter of advisors feel that digital advice represents competition.
Yet Brian Shea, CEO of investment services at BNY Mellon, stressed that the impact of technology goes beyond robos. “It’s really important to think more broadly about it and how to embrace technology to leverage your business,” he said. It’s important for advisors to embrace technology on all levels of their business and have a strategy to use it in order to effectively serve the next generation of “digital natives,” Shea said. He added that advisors are currently servicing “digital immigrants,” but using digital tools will become increasingly important in retaining and growing a client base.