Financial advisors have a number of decisions to make once they decide to adopt the new technology of robo-advising, says Accenture, a financial consulting firm.
“We believe that robo-advice will ultimately have an outsized impact on the wealth management business,” says the firm in a recent report, “The Rise of Robo Advice: Changing the Concept of Wealth Management.”
“Wealth management firms need to keep a close eye on operating costs and on ways to automate transactions and processes that are currently performed manually,” the report adds.
But before adopting robo-advising, financial planners need to ask themselves some questions. For instance, should the technology be developed in house, through a partnership or by the acquisition of another provider?
A decision also has to be made about whether the robo-advice will be a stand-alone offering, a full-service financial advisory package or a hybrid of the two.
Advisors also have to ask whether they can identify the most likely robo-advice customers. How will the firms deliver the product in an intuitive and satisfying way to the clients? How will the product be rolled out both externally and internally with the firm’s sales force?
“Although robo-advice to date has gained only a miniscule share of assets under management, it presents investors with an interesting value proposition,” says Accenture. “Overall, we believe robo-advice capabilities will effect profound and permanent changes in the way advice is delivered.”