Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

Roboadvisors don’t cause fee compression; when used correctly by advisors, they are the solution.

This really was disruption

The word “disruption” is on my list for my next cliché rant. Most companies that claim to be so-called “disruptors” are in fact just early stage adopters of a technology that somebody else thought up.

Betterment (shout out to Jon Stein) broke through with a direct-to-consumer model which was quickly replicated by the Fintech community (most of those firms have been gobbled up by larger financial institutions by now), to which the Schwabs and TD Ameritades of the world said, “not by the hair of my chinny chin chin” and responded by building their own versions.

So where are we in the technology lifecycle of roboadvisors? I’d say we’re still in the early adoption stage. The average person, or even the average private wealth financial institution, hasn’t adopted roboadvisors.

But doesn’t mean they don’t have utility for advisors who want to scale their businesses.