He does not believe that advisors adding robo-technology to their offering need to compete head-to-head with the established robo-advisors. “Just because Betterment uses Google Ad words to get clients doesn’t mean you have to use the same thing to get clients. You have your own marketing,” said Sokolin.
Advisors have three robo-advisor options:
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Outsourcing -- in which clients use an outsourced solution;
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Light-touch integration -- in which software is added, but the organization might give it a different brand;
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The organization of all the pieces of the program -- in which everything is integrated so an advisor can have 500 clients instead of 50.
Kitces noted that robo solutions may help with client on-boarding, but that is hardly specific to millennials. Sokolin zinged him by saying, “I appreciate Michael making my points.”
Robo-advisors cannot be narrowly defined. They are in financial planning, account aggregation and automated movements. They advise on savings and more. “A robo today is not what it will be in a year or two,” said Sokolin.
Ellinger believes robo-advisors will enable advisors to broaden their market. “It’s a huge opportunity to grow your practice in a way that maybe you haven’t thought of,” he said.
Looking forward, Sokolin stated, “In 50 years, it is going to be the technological engaged model.”
Mike Byrnes is a national speaker and owner of Byrnes Consulting LLC. His firm provides consulting services to help advisors become even more successful. Need help with business planning, marketing strategy, business development, client service and management effectiveness? Read more at ByrnesConsulting.com and follow @ByrnesConsultin.