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The New World of Virtual Advisors

While some advisors today operate totally by electronic communication, some investors still want and need the face-to-face, human interaction from their financial advisor.

| BY Kent McDill

One of the trademark characteristics of the betrayal of a dystopian society in film and literature is the fact that technology replaces the human element in daily life.

Welcome now to the world of Robo-Advisors, a new category of financial advising that can either include the human element in digital, electronic form or forego the human element entirely.

There are now financial advisors who do all of their advising via electronics, be it email, texting, or video-chatting. But there are also advising services known as robo-advisors, in which a customer inputs key financial and portfolio information and with the “click’ on the appropriate on-screen button, advice comes out.

A recent Spectrem Group study of affluent investors found that more of them would be interested in the non-human service than the human-but-physically-distance option. Asked to rate their willingness to participate in a service from 0 (very unlikely) to 100 (very likely), the advisors put themselves at 29.71 for the robotic advisor service and 21.32 for the advisor who can only be reached through technology.

As might be expected, young investors were more gung-ho about either choice. The under-40 crowd placed themselves at 54.53 for the robo-advisor and 43.68 for the human-but-online advisor. Among investors over the age of 60, the interest in robo-advisors was at 26.16 and the human-but-online advisor was at 18.18.

In 2015, Spectrem is going to release its first-time study Perceptions of Robo and Technology Advisors, an examination of whether investors are willing to move away from traditional advisor services.

The theory with the human-but-online advisor is that time is money, and going through the process of attending a meeting, no matter where it is, takes time, whether it is the client who goes to the advisor or vice-versa. When meetings take place on location, time is again wasted with salutations and refreshments, and it requires both parties to lock into a time for the meeting.

With a virtual advisor, a customer can send a message, and the advisor can get to it in his own time. If time is of the essence, texting can be chosen over email, and a customer can always request a face-to-face meeting via a video conferencing service such as Skype or FaceTime.

In the face of this kind of movement, traditional advisors are now in a race to become more virtual, allowing for communication outside the norm, if they want to compete for clients against the new fully electronic advisor.

“This whole event of going to see your advisor and sitting in their office twice a year – that whole vibe is going to change,’’ said Spectrem Group managing director Cathy McBreen.

Most of the robo-advisors do offer human interaction but customers are required to pay extra for that service. Otherwise, they can handle all of their transactions without communication from one human being to another.

But there are services such as FutureAdvisor, Wealthfront and Betterment which are entirely automated advisor services. For the electronically savvy, those who can answer questions and navigate an on-screen form to answer questions and get responses, robo-advisors are quick, easy, efficient and cost-effective.

There remain investors from all age segments who want personalized service and human interaction, including sharing the same oxygen.

According to the Spectrem study, 60 percent of investors said they prefer personalized service and electronic communication does not feel personalized; 50 percent said they want to meet their advisor in person, 36 percent said they don’t trust sharing personal information online, and 29 percent said only in face-to-face in-room communication can their true needs be understood.


About the Author

Kent McDill

Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.

In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.

McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.

McDill is the father of four children, and an active fan of soccer, Jimmy  Buffett and all things Disney.