When we talk about robo-advisors, the very first thought that comes to our mind is whether robo-advisors will pose a threat to traditional advisors. However, a recent survey conducted in US (where robo-advisors are big players) among 175 advisors, shows that traditional financial advisors will continue to play a major role in handling client’s finances for the next 10 years even as robo-services grow.
Although the study was conducted in US, its findings are useful for advisors in India.
The survey conducted by SEI, a US based business outsourcing company which helps financial institutions and financial advisors, shows that ten years from today, more than 58% of financial advisors will spend most of their time cultivating existing relationships through in-person meetings. While speaking on the topic ‘What robos can never do?’ CR. Chandrasekar, Founder and Director, Wealth India Financial Services said that financial advisors will always have an edge over robo advisors. “IFAs can provide motivation and behavioural counselling which robos cannot. Also, robos can provide data but not a narrative that can link investors to the real world.” He was speaking at the Network FP Conference held in Mumbai few months back.
The second most preferred mode of communication will be video conferencing (32%). Interestingly, only 10% advisors believe email, social media and events will be helpful for them to build client relationships.
Business development
Referrals will continue to remain a primary source of getting new clients. More than half (58%) of respondents expect referrals to remain the number one business generation tool in the year 2025.
With regard to social media, 16% respondents believe that it will be an important tool for new business generation 10 years from now. However, only a small percentage (3%) do not think it is the ideal tool to cultivate relationships.
Skills
A majority of respondents (54%) said that the most important skill for financial advisors in 2025 will be communication and interpersonal skills. Investment skills is ranked as the least important, supporting the need for a balanced approach with human interactions and technology, shows the study.
