MutualFundWire.com: Most FAs Expect Robos to Help Them Scale

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Friday, May 20, 2016

Most FAs Expect Robos to Help Them Scale

More than half of FAs see themselves gaining scale with the help of roboadvisors, not facing competition from them. RIAs are the most robo-friendly, while wirehouse brokers are the least robo-friendly.

That's one key finding from Fuse Research Network's inaugural "Advisor Top Trends" report from its Advisor Trend Monitor line. In partnership with WealthManagement.com, Fuse surveyed 1,100 financial advisors for their thoughts on a host of issues, including the rise of roboadvisors.

Patrick Newcomb
FUSE Research
Director of Benchmark Research

Overall, 36 percent of FAs say they see roboadvisors as competition. 23 percent see robos as a way to help "scale business across all clients," and another 30 percent see robos as a way to help "scale business across smaller clients." FAs age 60 and above were slightly less likely (21 percent for scaling across all clients, 26 percent for scaling across smaller clients) to be robo-friendly.

Pat Newcomb, director of benchmark research at Fuse, tells MFWire that roboadvisors "could be seen as more of a threat" to FAs who focus primarily on investment selection and see that as their main value. For other FAs, roboadvisor platforms can be "just an easier way to implement their clients' portfolios."

Robo-friendliness also varies significantly across the channels. Wirehouse FAs are the most wary of roboadvice: 45 percent see roboadvisors as competition, while 22 percent see robos as a way to scale across all clients and 25 percent as a way to scale across smaller clients.

Of FAs with independent broker-dealers, 39 percent see robos as competition, 16 percent as a way to scale across all clients, and 29 percent as a way to scale across smaller clients.

Of insurance FAs, 36 percent see robos as competition, 31 percent as a way to scale across all clients, and 29 percent as a way to scale across smaller clients. And of RIAs, 28 percent see robos as competition, 28 percent as a way to scale across all clients, and 42 percent as a way to scale across smaller clients.

Fuse and WealthManagement.com also grilled FAs about several other subjects, including product usage, fixed income allocations, and goals-based wealth management. Yet roboadvisors are "top of mind" for many FAs.

"There was a lot more advisor interest in it," Newcomb says. "Advisors are taking note."

Printed from: MFWire.com/story.asp?s=54038

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