Robo Advisor is software platform that automates the financial planning and advisory processes using pre-programmed algorithms without human involvement. Like other organization, financial and wealth management firms can also take advantage of automation by deploying Robo-advisors. The automation brought by Robo-advisors will increase efficiency of the financial advisory firms and remove bottlenecks of the manual workflows and processes. This, in turn, will be beneficial for the clients as well as the financial advisors.
In this article, we will discuss the advantages of integrating Robo-advisors and will also discuss the ways to integrate modern technology in financial and wealth advisory firms.
Advantages of a Robo-Advisor:
Apart from automation, Robo-advisors provide countless benefits to the firms deploying them. We will discuss some of the main advantages in this section:
1- Cost-effectiveness:
Organizations investing in Robo-advisors usually pay a one-time annual fee, depending on their subscription plan. On the other hand, financial advisory role requires compensation and fees that is often directly proportion to the number of clients, portfolios, and the assets under management. This means that the fees and compensation of a financial advisor will increase in relation to the number of clients and their accounts handled. This is where Robo-advisors can help your firm cut the costs and handle a large number of clients and their portfolios with the help of Robo-advisors as firms will only need to pay the subscription charges without paying for the number of clients or the scale of assets handled by the Robo-advisor.
2- 24/7 Availability:
Both the client and the financial advisory firm have access to a Robo-advisor with just a few clicks. On the contrary, human financial advisors have work limits bounded by fixed work hours. The introduction of Robo-advisor can fill this gap, allowing clients and financial advisory firms to perform tasks seamlessly by removing interruptions caused by non-availability of the financial advisors.
3- Portfolio management and rebalancing:
Today’s volatile financial markets require continuous monitoring of the financial markets because the success and return of a portfolio depends on the decisions of portfolio managers. However, a financial advisor can handle a limited number of portfolios effectively. There is a need for automation as many big financial institutions have integrated Robo-advisors that have not only assumed financial advisory roles, but also do automatic trading.
Robo-advisors can execute trades quickly and rebalance the portfolio easily keeping in view the risk-reward framework and regulatory limits, which is not easy for an individual financial advisor to do manually.
4- Increase in Productivity:
Digital platforms like AdvisorEngine can make your working environment paperless by converting your organization’s critical processes into automated tasks. This will boost your productivity and increase your firm’s efficiency.
5- Client Relationship Management:
Digital platforms like Junxure come with a Financial Advisor Client Relationship Management (CRM) platform, which enables financial advisors and firms to meet the needs of the clients and manage their accounts in a detailed and optimal way. Clients can also have real-time access to their accounts, enabling them to view different reports of their portfolios.
6- Online vault for accessing important documents:
Digital platforms like the Junxure CRM give you access to an online document vault, allowing you a quick access to the documents so you don’t have to sift through a huge cache of documents and waste your important time.
Conclusion:
It is evident from the above discussion that automation holds the key to success for any organization. In this fast-paced world, clients demand excellent services and providing them the services they want is only possible by investing in the modern technology. The benefits of the technology will overtake the costs of the technology quickly in the shape of increased productivity, higher revenue, higher customer retention, acquiring of new customers, and increased customer satisfaction.
