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Thoughts on 'robo-advisors' served cold, compliments of Kitces and Waymire

With the potential for channel conflict, wirehouses are the most handcuffed in thwarting automated financial 'advice'

Author Guest Columnist Jack Waymire June 15, 2014 at 7:40 PM
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Michael Kitces: Most of the Wall Street firms will be reluctant to bypass advisors and go direct to investors.

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Mentioned in this article:

Wealthfront
Portfolio Management System
Top Executive: Andy Rachleff

Paladin Digital Marketing
Consulting Firm, Marketing & Public Relations, Investor Referrals
Top Executive: Jack Waymire

Kitces.com
Consulting Firm
Top Executive: Michael Kitces

Betterment, LLC
Financial Planning Software
Top Executive: Jon Stein




Marty Morua

Marty Morua

June 16, 2014 — 1:12 PM

Comprehensive Services

Two little words that stood out in this interview. That’s probably the 'key’ to what financial advisors (real ones…..humans) need to offer in order to differentiate themselves from the Automated Investment Services (Robo-Advisors). Both serve different markets and both have their own unique value propositions.

Marty Morua

Stephen Winks

Stephen Winks

June 16, 2014 — 7:43 PM

beyond human comprehension

Stephen Winks

Stephen Winks

June 16, 2014 — 7:54 PM

My earlier comment was lost in transmission.

Advice as defined by statute requires continuous comprehensive counsel which means advanced technology (Robo Advice) is essential to address and manage an unlimited number of investment and administrative values for an unlimited number of clients in real time. There is no such thing as robo advice, just tools that allow advisors to manage information in a manner that transcends the three dimensional ability of humans to reason.

Robo advice should not be feared as it greatly elevates the level of counsel it is possible for advisors to render and manage. But it does render flipping high cost mutual funds as a service of little or no value.

The number of advisors who are accountable and responsible for recommendations will greatly increase while the number of brokers who are neither accountable or responsible will eventually disappear.

SCW

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