Will Robo-Advisors become the New Financial Adviser?
Today’s Financial Adviser is becoming today’s Robo-Advisor. The ranks of today’s Financial Advisers will most likely be significantly reduced in the next 5 to 10 years and possibly much sooner. Instead of visiting with your local adviser you will be managing your money using your desktop, laptop or mobile phone. Over 1 million B2B sales jobs will lose their jobs to self-service e commerce by 2020 according to Forrester Research, a reduction of 20% of the current workforce. Similar changes are already coming to the number of US financial advisors whose numbers fell for the fifth straight year to 285,000. The industry has lost more than 39,000 advisers, about 12%, since its peak in 2008 according to the Boston based research group Cerulli Associates. Nearly half of the current financial advisers are over the age of 55 and Cerulli expects about 100,000 of today’s FA’s will retire in the next 10 years. The growth in the financial services industry is coming from the Wealth Management sector where most earn fixed annual fees based on total assets managed. However most wealth managers want clients with at least $500,000 or more to invest and these minimums are increasing. JP Morgan/Chase’s Wealth Management…
