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Ask Chuck? How About Ask Schwab’s C-3PO?

Ask Chuck? How About Ask Schwab’s C-3PO?

For human advisors, the robo-advising move into mainstream means that they will have to work harder to prove their value to current and potential clients.

I’ll admit it. When I first saw Charles Schwab’s ads for its new Intelligent Portfolios, I found the talking blue digital monitor a little bit creepy. I mean, haven’t we seen enough sci-fi movies about self-aware robots to think “the singularity is here” when we encounter a robot that sounds human? Of course, the digital monitor that stars in Schwab’s advertising campaign isn’t really a sentient robot; it’s a clever advertising campaign designed to grab people’s attention. And it has: Adweek named it the “ad of the day”; The Wall Street Journal discussed the impact of Schwab’s Intelligent Portfolios platform in a blog called “Going Robo”; and, not to mention, Schwab’s venture into the robo-advisory market has caused a backlash of criticism from competitors.

In an Adweek interview, Schwab chief marketing officer Jonathan Craig said the firm’s launch of Schwab Intelligent Portfolios is meant to be a “large, disruptive move” that could change the way that Americans invest. Disruptive move?  Yes, it certainly is. The extensive media coverage of the platform launch is testament to that. We in the wealth management industry have questioned – and, in some cases, fretted about – whether investors would be willing to trust algorithms to make investment decisions. By launching Schwab Intelligent Portfolios, the firm is putting its money where its mouth is and saying, “Yes, robo-advising is palatable to mainstream investors.”

For human advisors, the robo-advising move into mainstream means that they will have to work harder to prove their value to current and potential clients. The blue monitor in the Schwab commercials may sound slick, but in reality, investors working with a robo-advisory platform won’t have their own personal robotic Jeeves.  No matter how good the algorithms are, there always will be some things that you, as a fellow human being, can do as a financial advisor that a robo-advisor can’t.  To prove your value to clients, you simply have to do the following:


  • Provide Empathy: Is your client worried about having enough savings for retirement, caring for a sick parent or child, or navigating finances after going through a painful divorce? You, as a human being, can empathize with these life events. First listen to the client’s fears and concerns and then offer practical financial advice for dealing with the issue.
  • Connect Person-to-Person: Sure, a robo-advisor can be programmed to learn clients’ birthdays, anniversaries, and other important dates and reach out to clients accordingly. However, nothing beats the personal connection of your financial advisor remembering an important date in your life and sending you a handwritten card. It doesn’t have to be much: Just a simple birthday card that says, “Best wishes on your special day. Let me know if you have any questions about your investments or would like a meeting,” will work wonders.
  • Work with the Whole Family: One of the biggest mistakes that financial advisors make is only interacting with one member of a client’s family unit. If clients don’t bring their spouses or significant others to meetings, encourage them to do so, as face-to-face meetings are a great way to connect with clients in ways that robo-advisory platforms can’t. Then, during the meetings, be sure to interact with both parties – make eye contact, address each person’s questions, and follow up with both people. Otherwise, you risk losing a valuable client if your primary contact dies and the widow or widower decides to switch financial advisors. And don’t forget about your clients’ adult children, either, as they too may become inheritors.


So will mainstream robo-advisory platforms be formidable components for financial advisors? As we all know too well, it all comes down to AUM. Time will tell whether Schwab’s courageous venture will translate to an influx of AUM from investors who rather deal with a robo-advisor than a flesh-and-blood one.

I mean, sure, Schwab’s new Intelligent Portfolios ads are cool and innovative. But who are they targeted to? And, more importantly, do those people have money to invest? The easy answer is millennials. Millennials – kids born after 1980 and before 2000 – have grown up on a diet of friendly robots . . . just think WALL-E.  And many millennials are saving for retirement, as they should be. But are potential millennial clients enough to warrant launching a new platform and advertising campaign? And will the Schwab brand persuade these young investors to use Intelligent Portfolio versus a lesser-known robo-advisory competitor? If Schwab’s Intelligent Portfolios platform only attracts millennial investors, then I don’t think it will garner enough AUM to make waves in the financial advisory business.

But I don’t think the ads are geared entirely for millennials. When I first saw Schwab’s ads, I thought to myself, “Why does the talking monitor have a British accent? Schwab is an American company.” Then, it hit me... C-3PO! The young Star Wars fans who grew up loving the helpful droid during the ’70s are now hitting 40, with families and saving money for retirement to think about. While appealing to millennial investors alone may not make Schwab’s Intelligent Portfolios platform viable, appealing to them and aging Gen-Xers certainly might bring in enough AUM to make other mainstream firms jump on the robo-advisory bandwagon.

That said, for me, I’d take a Rosie the Robot that can cook me dinner and clean the house over a robo-advisor any day.



April J. Rudin, Founder and President of The Rudin Group, is a financial services marketing strategist.

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