Late next year, Rob Foregger plans to offer retail advisors technology to rival any online robo-advisor's platform.

Advisors who have avoided moving their businesses online, he says, will see in NextCapital's retail digital advisor platform a way to serve more clients, while still retaining the personal relationships their clients count on. The Chicago-based digital advisor and technology provider believes it can equip individual advisors with multiple asset class models, portfolio analysis tools and advice methodology for affordable rates, due to the benefits of scale NC realizes from its institutional 401(k) managed accounts and portfolio management services.

Together, NextCapital's co-founders, Foregger, John Patterson, Dirk Quayle and Jon Hagen, embody the technology that helped open the door to the digital advisor era. The team created the first 401(k) managed accounts platform, one of the first online banks (EverBank), and the first electronic financial advisor, Personal Capital. Now Foregger wants advisors to succeed despite robo competitors by adapting a hybrid of human interaction backed by digital support. Doing so, he says, will produce higher client volumes for less money. (This fall Transamerica Ventures Fund and Russell Investments led a $6 million investment in the NextCapital.)

In particular, advisors who have wanted to take on small, employer-based retirement plans, but have held back because of the volume-related time and labor costs required, may find they can through NC's platform with its automated registration and aggregation, which is available now at NextCapital.com.

A lot of time can be saved through digitizing with NC's aggregator. The online aggregator, which Foregger calls “Beyond the Shoebox,” digitizes client minutia: confirms, receipts, transcripts and financial statements, freeing the advisors for in-person counseling on budget preparation and retirement strategies. Since the aggregator is open to anyone, advisors can encourage prospects to enter their investment information for advisors to review and offer personalized advice as an example of their services.

When NC's retail digital advisor platform comes online in the third or fourth quarter, says Foregger, NC will enable advisors with portfolio analytics, multiple asset class models, portfolio analysis tools, advanced retirement planning and retail managed accounts services, for which advisors will be fiduciaries. NC views the platform's ability to make managed accounts affordable to clients as an alternative to target-date funds, one that takes into account not just a client's age but other personal details and all of their assets, and, as a solution to attract millennials in a cost-effective way. Although NC is not discussing “pricing models,” he says, the rates will be competitive. 

“I believe that advisors [who] truly embrace the new digital advice capabilities coming online will be in a strong position to retain their existing client base, and nicely grow the millennial demographic in need of financial advice,” says Foregger, NextCapital's EVP.  He compares the threat of robo or the digitalization of client advice to the advent of online banks, when no one expected them to last. “They said no one would ever bank online.” Now, “there's no question that the advisor business is going digital,” he says. “But we think it's a false choice. Clearly there is room for both a mostly automated client experience and an advisor-centric model. Our businsess model isn't about replacing but empowering the advisor.”

Says Foregger: “The opportunity for traditional advisors to go digital is much larger than the threat.”