Six tips for competing with robo advisors

1 Focus on retirement plans

Robo advisors aren’t as abundant in the retirement plan industry as they are in the wealth management space. So, if you don’t currently sell retirement plans, you may want to consider it. This market can be ripe with opportunity—7.5% of plans with $10 million or less in assets are expected to change providers. That amounts to nearly 49,500 plans in motion and approximately $83 billion in assets.¹ Serving as a plan’s financial professional can also lead to financial planning opportunities with the company’s owners and executives. To help you get started, consider teaming up with a colleague who has retirement plan experience.

2 Add a managed account option to your investment offering

This tip may surprise you, but offering a managed account program could benefit your practice, especially if you work with retirement plans. As much as you’d like to, you likely don’t have the time or resources to advise every participant one on one. Managed accounts are a way to provide all participants with access to objective advice while you focus on your target market. This service can also demonstrate your commitment to driving better outcomes, which can help strengthen your client-advisor relationships.      

3 Communicate your value proposition

Whether you’re competing against another personal financial advisor or an online provider, prospective clients need to understand why you’re the best person to help them reach their financial goals. Make sure your value proposition clearly conveys what sets you apart from everyone else, including:

• Why you do what you do
• Your target market
• Your service offering
• Success stories

You should also describe the level of personalized service (human interaction) clients can expect when they work with you as it’s often limited with online investment advice solutions.    

4 Identify opportunities to enhance your services

As you work on your value proposition, take time to examine your current business model. Are there services you could add to help differentiate yourself from robo advisors who tend to focus on investment management? For example, could you add estate planning or intergenerational financial planning? Offering comprehensive financial advice may help tip the scale in your direction. And like retirement plans, you don’t have to be an expert. You just need to partner with people who are. 

5 Review your infrastructure

Similarly, make sure it’s easy for clients to do business with you. A user-friendly website is essential for competing with the convenience of online advice providers. Clients want to be able to access account information on their schedule and handle simple transactions themselves.         

6 Embrace social media to help build your personal brand

LinkedIn and other social media platforms tend to be one of the first places people check when deciding to work with a financial professional. These platforms can also help you build digital relationships that can turn into business opportunities. Consider sharing a mixture of content that helps prospective and existing clients get to know you both as a person and as an investment or retirement plan specialist. Before posting anything, be sure to check with your compliance team about your firm’s social media policy.

Treat robo advisors like any other competitor       

Ultimately, it’s important to remember that there’s room in the financial services industry for both personal financial advisors and online investment advice. For the most part, your success depends on how well you can sell yourself. If you demonstrate your value, share your expertise, and provide personalized service, you can rise above the competition—human and digital.