Three industry insiders give their views on this contentious issue.
Brad Brain, Senior investment advisor, Brad Brain Financial Planning:
“In time, technological advances, including robo-advice, will squeeze out thousands of marginal advisors and make it more difficult for new advisors to establish their careers without a long period of apprenticeship. But I think it will be a time of abundance for the really, really good advisor. I just don’t see roboadvice as an acceptable substitute for high-end talent and experience. Financial planning is more than merely an algorithm and a basket of ETFs. Knowledge is not wisdom, nor is it empathy. Robots can be really good at playing chess, but … they aren’t going to cut through the cacophony
of nonsense that impedes clients from reaching their great goals in life.”
Meagan Balaneski, CFP and insurance broker, Advantage Insurance & Investment Advisors:
“To the contrary, I think robo-advisors are absolutely necessary if we are to maintain the professional quality of our advice. Even if commissions are continued and we are spared an advisor exodus, with the average age of an advisor at 58+, within the next decade we’ll still be staring down the barrel of a very significant advice gap. Emerging is an opportunity for roboadvisors to use their marketing prowess to help younger generations care more about saving for their future. Balancing a client’s personal fears with the implementation of advanced strategies is an advisor’s art. Algorithms will never replace that. But they can provide lowcost advice to get investors saving.”
Kevin Cahill, Founder, :Canadian Legacy Builder:
“The title of ‘advisor’ is amusing and misleading. Anyone can advise. Anyone with a calculator and a ‘Finance for Dummies’ manual can tell people to spend less on that and invest in this. There are financial professionals, and there are financial amateurs. I believe robo-advisors will replace the amateurs in the financial industry but will encourage true professionals to come together and restore the financial planning profession to the respect and credibility we all deserve. The need to enhance consumer protection is real, and standardization through technology is a great opportunity.”