Investment News - Technology issues test RIAs and custodians

Figuring out robo-advisers and fiduciary are among top concerns for financial planners


Gather the technology leaders of competing custodians and registered investment advisers of various sizes, and there are sure to be some disagreements about whether robo-advisers are a blessing or a curse and which are the greatest cybersecurity threats.

This InvestmentNews Technology Think Tank roundtable in New York on Sept. 13, began with an adviser taking aim at digital advice providers.

Perhaps the greatest impact robos have had on traditional providers of advice is that they have brought the "Amazon experience" to brokerage and financial planning, said David Edwards, founder of advisory firm Heron Wealth.

"They allow the investor to open and fund an account in five minutes, not in a few days," he said.

It's the technology-enabled user experience of having easy access when, where and how the client wants that is the hallmark of robos and that traditional advice firms will have to adopt and incorporate, participants said.

Along with robo-advice's impact on the user experience, its lower cost is driving traditional firms to become more efficient in order to compete.

For robo-providers, the lower price point means they have to have many more clients to sustain a viable business. In addition, competition in that space is heating up and leading many providers to seek out larger partners.

Read the entire article at Investment News.