We’ve had an increase in dinner party conversations about the robo-advisor community. Many investors wonder how I feel about Artificial Intelligence (AI) and the increase in Robo-Advice. Frankly, I think they serve a purpose. They will push the investment industry to improve on account opening and “Know Your Client” (KYC) maintenance applications, so that we can finally move away from paper. “Electronic” is certainly the way to go for the basics, including such things as asset allocation and commoditized model portfolios. This is no different than the inception of the discount brokerage industry that I was a part of in the late 1980’s. This separated the cost of the trade and the cost of advice, which was a fantastic evolution of the industry.
As far as getting ‘advice’ from a robo-advisor, I wonder what all the fuss is about. I cannot imagine reducing my clients and those that seek my advice into an equation to be created, a formula to be solved, or into an algorithm made up of 1’s and 0’s. Every inves-tor has a set of complexities, history about money (both positive and negative), and objectives that may be impacted by motivational values that they may not even understand or appreciate. The only way to identify these is by getting to know each individual, couple or family unit through on-going conversation over time.
Thank you ‘robo-advisors’! Your commercials are working. We appreciate the influx of recent referrals.