You dont have to scour far in our economy to find industries that have been disrupted by technological innovationretail, real estate, travel planning, and now taxi services. The same will happen to the financial advisory industry with robo firms, predicts Deborah Fox, a planner and the chief executive and founder of consulting firm Fox Financial Planning Network.
Our industry is at the early stages of disruption by robo advisors. Its not a question of if this will happen but when and how much, Fox says.
And advisors need to respond to this threat not just incrementally, she says. Rather, they need to take big steps to upgrade their businesses. While advisors may have thought about improvements, they often procrastinate about making those changes happen, she argues.
Fox has composed a shortlist of the possible upgrade advisors should consider right away. Her proposed upgrades:
- Create service teams so clients rely on more than one advisor.
- Systemize processes and procedures so clients get a consistent experience.
- Most importantly, develop as many as three financial planning specialties so clients depend on their firms for more than just managing their portfolios.
By developing such specialties, the firm fighting off the advance of the robos, will maximize the advantage that they share over the robos: "their human touch," says Fox.
Miriam Rozen, a Financial Planning contributing writer, is a staff reporter at Texas Lawyer in Dallas.
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