Most financial advisors are not adopting robo-advice platforms and have little intention of doing so in the near future, says Practical Perspectives, a consulting and research organization for the financial industry.
Only 7 percent of advisors consider implementing a robo-advice platform to be a priority over other practice management issues they want to tackle in the near future.
The study, “Exploring Robo-Advice From The Advisors Perspective -- What Advisors Think About Digital Advice 2016,” included 850 brokers, financial planners and RIAs.
Eighty percent of those surveyed are aware of robo-advisors, but most have no timetable for introducing the capability, Practical Perspectives says. Advisors anticipate that any digital clients they may have in the future would eventually transition into full-service clients.
“Advisors want help defining their role in serving clients using a digital solution and in aligning robo-advice with more traditional approaches to attracting and engaging clients,” says the report. RIAs are the most likely to offer robo-advice now.
Advisors view custodians and broker-dealers as preferred sources for accessing robo-advice solutions. Schwab, Vanguard, Betterment and Wealthfront are the robo-advice providers most widely recognized by advisors.
“Most advisors are aware of robo-advice, but many have yet to spend time exploring or understanding how they might leverage this solution going forward,” says Howard Schneider, president of Practical Perspectives. They “want more clarity on whether it is a fad to be avoided or a long-term opportunity to be embraced.”