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New Poll Finds Roboadvisors Here To Stay – And Welcome



Nearly three-quarters of executives polled in a recent Fidelity Institutional survey said that the digital advice model is here to stay, and the digital channel is seen as a way to tap into the needs of the mass affluent.

The poll found that 74 percent of broker/dealer and registered investment advisor (RIA) company executives see the development of virtual channels as a trend that will benefit the industry.

Roboadvisor is a term to describe investing by computer algorithm with no human or “live” intervention.

Michael Durbin, president of Fidelity Institutional Wealth Services, said that companies that can support the value of face-to-face interactions with digital channels will be well positioned to reach a broader segment of investors.

“This formula has the potential to be what the industry needs to support a broader segment of mass affluent investors efficiently and with scale,” he said in a news release.

Mass affluent households are defined as having income producing assets of between $250,000 and $1 million. Approximately 13 million households around the nation were identified as mass affluent in 2012.

The latest results come courtesy of a Fidelity Institutional survey conducted last month at an executive forum attended by more than 300 executives.

Fidelity also found that 54 percent of executives also believed digital advisors can’t replace the flesh-and-blood relationship of live encounters.

The poll found that 32 percent of respondents said roboadvisors represent an evolution of the financial advice profession, and 31 percent said the digital channel represents a model with which traditional advisors can strike fruitful partnerships.

Only 22 percent of respondents said roboadvisors lower the quality of financial advice.

Sanjiv Mirchandani, president of National Financial, a Fidelity Investments company, said that among respondents, awareness of digital advice still ranks low — only 13 percent of executives say they feel informed about the model.

“Firm leaders should evaluate the wide range of new models emerging and identify which elements may be useful to embed into their advisors’ practices,” he said.

Digital models will have the greatest impact on the cost of advice and the availability of the advice, the executives said.

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When the Internet began to be used widely in the 1990s and after the turn of the century, its effects on financial services companies were far-reaching. The Internet brought to the marketplace a level of pricing transparency that had never been achieved before.

Pricing models dropped overnight and investors could execute trades for a few dollars. Consumers also had access to more information, which gave them the ability to compare products and services more accurately.

Some analysts at the time talked about how the Internet would “disintermediate,” or take away the intermediary function of brokers and advisors.

As it turned out, some brokers and advisors fell by the wayside, but many more adapted and survived.

is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].

© Entire contents copyright 2014 by Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from


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