Nearly four in 10 advisors surveyed (37%) see the increasingly prominent roboadvisors as competition. Meanwhile, three in 10 say robo-advisors provide an opportunity to scale up their business with smaller clients, and a quarter (24%) see the trend as an opportunity for all of their clients (advisors could choose more than one response).
Advisors from independent broker/dealers and RIAs were more likely (35%) to view robo-advisors as an opportunity for scaling up smaller clients than for their entire book (21%)—a belief supported by the fact that half (53%) of independents would outsource clients with less than $25,000 in assets to a robo-advisor.
Meanwhile, advisors from large regional firms and national wirehouses were more likely to view robo-advisors as competition (43%) and slightly more likely to see them as offering opportunities across all clients, rather than only small clients (24% versus 21%). Many advisors view robo-advisors as neither opportunity nor competition, however. Says one advisor with eight years of experience who works at an independent broker/dealer: “If a client does not value an advisor relationship, then they are not a potential client for me.”
Next Part 2 of 5: Fees Over Commissions