Skip navigation
algorithm robos

Editor's Letter: January 2017

Is There a Future Here?

Predicting the future is a fool’s errand, as so many people discovered in our recent presidential election.

That said, in this issue we wanted to take a look at the future of wealth management. Not just over the next few years, but over the next few decades. What does the financial advisory industry look like in 2037? That was the question we asked a number of people in the field, and a handful of their responses appear here. (More are published on, including an entertaining, but cautionary, piece of speculative fiction from PrarieSmart's Ron Piccinini on how cheap technology may help us cope with an underfunded retirement.)

Technology clearly plays a leading role. Technology doesn’t stop with the robos just helping us allocate assets. Digital automation is taking over more and more of an advisor’s tasks—which is a good thing, we are told, as advisors can then concentrate on building relationships with clients.

But at what point does automation take over completely?

I remember when the robos first started making waves in the industry, and they were dismissed. No robo would ever replace a human advisor. 

Then, just as quickly, they were accepted with the caveat that a good financial advisor does so much more than investment management; it’s the financial planning piece of the puzzle where an advisor really creates value.

Now, as large parts of financial planning are also being digitized, the standard response has changed again—now we’re told advisors are really meant to be “life coaches” and empathetic listeners who, just by dint of their human presence, give clients the confidence to know they can trust what the machines are telling them.

But I don’t know how empathy scales as a business. If the role is to be the reassuring partner in a relationship around intimate topics like family life, finances, health care, childbirth, divorce and retirement readiness, that seems to place a cap on the number of clients an advisor can effectively serve.

We’re told to imagine a future advisor as a kind of bionic professional, outfitted with the latest digital tools and resources to deliver high quality advice with a smooth, client-centered service. For some, this is certainly true, and they’ll figure out a way to create practices that highlight not the process, but their own unique vision and approach.

For others, the future looks like Vanguard’s Professional Advisor Services, which, after launching just a year and a half ago, already has $50 billion in AUM. Here, the client handles much of the planning and investment process themselves, online. There is an advisor, yes. He or she fields calls when a client is unsure of something or needs some assurance they are entering the data correctly. There is no real “relationship” with that advisor, and for most clients, that’s fine. They don’t need a best friend. They need someone sitting in a service-oriented call center ready to answer very specific questions. It’s a worthy job, but I’m guessing that’s not why most advisors got into the profession. 

David Armstrong


TAGS: Technology
Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.