Robo-Advisors Vs Client Profiler
2016-02-02 | Ankit Agarwal |    63


It has almost been a decade that Robo-Advisors penetrated the Wealth Management sector and they still continue to proliferate deeper, even more disruptively. In just 10 years they have been able to attract investors and are estimated to be managing around $20billions currently. The industry primarily focuses on Portfolio management and is most common in the USA, apart from presence in other continents.
The main reasons for this prompt acceptance of Robo-Advisors as an industry could be the lower fee, transparent or pre-decided payment policies and the ease with which the service could be obtained online, saving the hassle of meeting a financial advisor.

On the other hand, client profiling has always been an integral part of the Wealth Management industry and generally one of the initial actions of the whole planning process. The client profiler helps in estimating the needs and wants of an investor and analyses the inputs given in a questionnaire, which forms a base for further analysis for the advisor.

So primarily, in both the scenarios the Investors are required to answer a set of questions pre-decided with utmost care by experts, in order to be able to gauge the correct preferences.

So, what is the difference?

Although there is this fundamental similarity, the Robo-advisors are able to provide consultations and advices autonomously. They perform independently and combine the elements of both client profiling and financial advising, thus becoming a complete exhaustive solution in itself. It is a comprehensive One-stop-solution for any investor, which is fast catching up and annexing more and more market share. The success of Robo-Advisors can be attributed to the intelligently automated advanced algorithms inbuilt in the software. Whereas client profiler remains to be used only for primitive task of segregating the prospects to different classes.

Is there any way the Client Profiler can survive & grow?

Probably yes. Generally, inventions and products become archaic and irrelevant when there are no enhancements and improvisations. However, if it takes cue from the Robo-Advisors and intelligence factors are added, for example features for advanced and more complex data summarization and analytics for compound problems, there is still a long way to go.

But, if things stay the way they are, we feel Client Profiler would soon become redundant and the usage will drop significantly. The investors or even the financial advisors might soon prefer using Robo-Advisors, which provide extra level of output with the same level of input from the client.


Ankit Agarwal

CTO at Hexaview Technologies Pvt. Ltd.

As Technology Evangelist, Ankit drives the technological innovations within Hexaview to provide superior and well integrated solutions for advisory world. He likes to talk about technology trends in financial industry and other emerging technologies of interest. Under his guidance, Hexaview has provided simple yet effective solutions to dozens of financial firms across Unites States.