Skip navigation
Pershing: Advisors Not Sold on Teaming with Robos

Pershing: Advisors Not Sold on Teaming with Robos

Despite the hype, advisors are not sold on the idea of using robo-advisor platforms in their business. In fact, only 19 percent believe digital advice can complement their practice, and only 5 percent of advisors are using the platforms, according to a new study by Pershing released at the firm’s annual INSITE conference Wednesday.

“It is short-sighted to limit the ways technology can complement a business to only digital advice,” said Kim Dellarocca, managing director at Pershing, in a statement. “Digital advice is important, but it is only one area where a firm needs to evolve their technology strategy to deliver a wealth management experience that mirrors the expectations of today’s consumers and workforce.” 

Of all advisors who are familiar with robo-advisors, 23 percent see them as competition, while 27 percent say they’re irrelevant to their practice. About a third say they haven’t yet developed a view on the technology.

Pricing was one of the top concerns, with 76 percent of advisors viewing the low cost of digital advice as a major or minor threat to their practice over the next five years, the Pershing survey found. Advisors also feel threatened by the new business models of digital advice providers that offer either in-person access to a human advisor (with 82 percent viewing this as a major/minor threat) or remote access to an advisor (with 80 percent citing this as a major/minor threat).

That said, many advisors see these tools as an opportunity. Sixty-seven percent of advisors, for example, believe algorithms that generate a suggested asset allocation could present a minor or major opportunity for their business, and 62 percent expect automatic tax harvesting of accounts will be a minor or major opportunity for them. 

“Digital advice is only one of today’s new technological tools, albeit the one that attracts the most media attention,” the study says. “Other computer-assisted processes include opening accounts, moving funds, performing e-signatures, and automated client engagement (such as customized content delivery by noting client areas of interest). Taken together, automating these tasks helps to create a comprehensive digital experience for clients and advisors. Overhead is reduced and less paper clutters the digital office.”

Pershing’s Third Annual Study of Advisory Success: Confidence and Concern in the New Digital Age was conducted by interviewing 350 U.S. advisors, including 101 RIAs, 100 wirehouse advisors, and 149 advisors at insurance agencies, independent b/ds or banks.  

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.