What’s next for robo-advisors in 2017?

Wealth Professional spoke to an industry insider about the future of robo-advice platforms

What’s next for robo-advisors in 2017?
It’s not often that a topic divides opinion as much as robo-advice. Some advisors have eagerly implemented new platforms into their businesses as a way of increasing their value proposition, while others have been reluctant and are somewhat suspicious of robo-advice. Wherever you stand, robo-advice platforms are here to stay and their popularity is only likely to increase. But what’s next in the robo-advice space in 2017? We sat down with Mansi Singhal, co-founder of Qplum, to find out.
Advisor networks

“There are many new FinTech firms who want to act as matchmakers in the robo-advice space. They want to help consumers solve the problem of finding the right robo advisor,” Singhal says. “If you only have a single digit dollar amount to invest or you’re looking for more holistic planning, matchmakers navigate the overcrowded industry and give a list of the best options.”
“There are two or three matchmaking services coming out and there are certainly more on the way.”
Tackling the distribution problem

“Every robo-advice platform is tackling the problem of distribution; they’re all trying to figure out how to get access to a bigger market base,” Singhal says. “E-commerce platforms are showing tremendous interest and they are very good at attracting people to their platforms. They already have big subscriber bases and people buy pretty much everything on these platforms already. Now, these platforms are thinking: why can’t people buy financial advice when they can buy gadgets, books and laundry detergent?”
“We are in discussions with certain platforms and others in the industry are too. It’s just a matter of time because these e-commerce platforms are definitely willing to take the plunge. This can be a very big hit for the industry.”
Acceptance of change

The attitude towards robo-advice has been very combative from some sections of the traditional advisory community, but that shouldn’t be the case," Singhal says. "The technology is for everybody to consume, including a traditional advisor. We should look at the technology itself and what it can bring, and not make it ‘robo versus traditional’.”
 It’s a team game 

“I’ve been to a dozen conferences this year and every time I talk about the technology, many traditional advisors are either vindictive or dismissive," says Singhal. "I think the problem traditional advisors are facing is that they just don’t have the team in-house to be able to consume the technology.”
“If you’re a boutique firm of two or three advisors, you typically don’t have technology staff in-house to actually navigate the initial onboarding hurdle - that’s the biggest problem.”

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