Tech Trending

The Coming Automation of Wealth Management

Research uncovers a marked discrepancy between advisors’ thoughts, actions, and the reality of the market

OMAHA, NE–(Marketwired – September 01, 2015) – CLS Investments, LLC (“CLS”), a third party money manager and a leading manager of exchange-traded funds (“ETFs”), released its latest white paper in its Advisor IQ series today, The Coming Automation of Wealth Management and What it Means for Today’s Financial Advisor.

The white paper reveals findings on the emergence of the “robo advisor” as a catalyst to a broader trend among advisors to have a tenuous relationship with technology.

The white paper explores broader industry trends, advisor perceptions of robo technology, practice management implications, how to deploy a robo solution, and the future of wealth management. The key takeaway from the CLS research is that advisors need to take heed and start to embrace technology more broadly, not just in the robo category, but also in front and back offices to drive necessary efficiencies in a world of compliance, security, and pricing pressures.

A Planning Crossroads

“Financial planning is at the crossroads of a technological shift, amongst both financial planners themselves and the clients they serve,” said Todd Clarke, CEO of CLS Investments. “In the years ahead, the impact of developments like robo advisors and other advancements in client facing technologies will continue to push traditional advisors to find new ways to manage wealth, leading to a whole new breed of advisor.”

Historically, changes in consumer technology have had a slow industry adoption rate due to the highly regulated nature of financial services. There have been many examples of resistance to these consumer technology innovations, such as email communication, websites, social media, and mobile devices. Due to a lack of understanding of how to manage these technologies based on inertia and compliance concerns, many firms initially prohibited these new technologies.

These legacy concerns exist today. For instance, to get a sense of the advisor’s familiarity with a more casual deployment of technology, CLS asked respondents how they communicat with clients. Surprisingly, the responses were consistent across all age groups, with advisors preferring to communicate with clients via phone, email, face-to-face meetings, and printed material. Social media and online platforms came in last. The difference in preference between the youngest and oldest cohort was negligible.

Automation is coming

However, a nagging wakeup call is ringing loud and clear: automation is coming to wealth management and advisors need to start preparing now to leverage their core competitive differences, or else risk being marginalized in the near future. Almost all industry experts agree that the personal, human element in delivering financial advice will not be replaced by machines. Regardless, the fundamental economics and consumer expectations for working with advisors will forever change through new client facing and automation technology.

The battle of the future will not be humans versus robots; rather, it will be those advisors who use technology to provide an outstanding client experience versus those that don't

“The battle of the future will not be humans versus robots; rather, it will be those advisors who use technology to provide an outstanding client experience versus those that don’t. Going forward, the one thing that remains the same in the wealth management industry is change. It is constant. Advisors and industry participants who continue to embrace that change are the ones who will come out on top,” concluded Clarke.

For the full copy of the new CLS white paper, The Coming Automation of Wealth Management and What it Means for Today’s Financial Advisor, please visit:

CLS Robo Survey Key Facts and Findings

  • 54.5% of respondents are over age 45
  • 50 of the 134 respondents are over the age of 55
  • 95.5% of respondents (all ages) believe themselves to be “knowledgeable” to “very knowledgeable” about technology
  • 60% of respondents would trust robo advisors to help manage and oversee client assets
  • 96.7% of respondents believe that humans and robo advisors can “co-exist”
  • However, 78.4% of respondents perceive the robo advisors as a “potential” to “significant” threat
  • 81.8% of respondents believe they have a “clear” understanding of what a robo advisor is
  • 48.1% of respondents categorized robos as “a low-cost, technology based financial advisor for the masses”
  • The majority of respondents (79.5%) believed that robos would have either a positive or neutral impact to their practices

To speak with a CLS spokesperson, or to request the raw data from the survey results, please contact:



About CLS
CLS is an Omaha-based, family-owned and operated boutique registered investment advisor managing in excess of $6 billion. As one of the largest third party money managers and ETF strategists in the U.S., CLS partners with thousands of advisors, plan sponsors, and institutions to offer a full suite of outsourced portfolio management solutions for more than 35,000 individual investors. CLS specializes in creating portfolios based on a distinct risk budgeting methodology and active asset allocation approach. The CLS investment process is governed by systematic research across asset classes and strategies and the continuous measuring of risk. CLS claims compliance with the Global Investment Performance Standards (GIPS®) CLS Investments, LLC is a registered investment adviser. To obtain a copy of a fully compliant presentation and/or a list of composite descriptions, contact us at 888-455-4244. CLS is a member of NorthStar Financial Services Group (NorthStar), which currently has more than $326 billion* in assets under management and administration. To learn more, visit
*As of 6/30/2015