I have come across this question few times. Below is my response.
Robo-advisors / automated investment managers (AIMs) will make things hard for financial advisors with mediocre skills, and some jobs in this segments will be lost. However, financial advisors with superlative skills will survive (and may thrive) as they start to focus more on providing financial advisory services that are not provided by AIMs.
In fact, some traditional advisors might use the services of AIMs too while serving their clients. The profit margins of traditional advisors will definitely take a hit.
Another aspect to consider is that the biggest target market for most of the AIMs is the “unadvised” segment — those who do not have enough savings that would enable them to seek quality financial advice from a traditional advisor. So, the growth of the AIMs does not translate to immediate replacement of traditional advisors, because most of the clients of AIMs were never the existing clients of traditional advisors. AIMs are playing the role of increasing the size of the pie, as of now.
- Which jobs in wealth management can’t be automated/ replaced by robots?
- What is the future for wealth management?
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