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.”