As registered investment advisors navigate the ever-changing landscape of the financial industry, the rise of artificial intelligence (AI) has sparked both curiosity and concern. In a recent interview with Thomas Moore, director of Betterment for Advisors, he shared valuable insights on automation and its impact on financial advisors today.
Moore emphasized that the initial fear of robo-advisors disrupting traditional advisory practices has largely subsided. Instead, he highlighted the coexistence of robo-advisors and traditional advisors, serving different clients with distinct needs. In fact, many tools initially associated with robo-advisors are now commonplace in the daily practices of financial advisors.
One of the key challenges faced by advisors is overcoming inertia – the resistance to change existing processes or embrace new technologies. While younger advisors may be more inclined to adopt innovative solutions, Moore emphasized that the core indicator of success lies in a willingness to evolve and improve efficiencies, regardless of age.
With the impending “great wealth transfer” on the horizon, advisors are advised to build relationships not only with current clients but also with their future heirs. Understanding the evolving needs and preferences of different demographics, such as millennial clients, is crucial for advisors seeking to remain relevant in a changing landscape.
Looking ahead, Moore discussed the shifting landscape of RIA custodians following the Schwab-TD Ameritrade merger, presenting new opportunities for advisors seeking better technology solutions. Additionally, he highlighted the retirement-to-wealth movement, where wealth advisors are increasingly focusing on serving small business owners and converting retirement plan participants into wealth management clients.
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