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Should you fear so-called robo-advisors as unfair competition? No, says George Hartman, CEO of Market Logics Inc. in Toronto. Rather, he says, you should regard robo-advisors as a valuable tool to enhance your efficiency, “freeing you up to spend more time with your clients.”

The only financial advisors who should fear robo-advisors are those who offer only basic investment advice.

Robo advisors offer automated investment advice at a low cost, putting some pressure on advisory fees. And because robo advisors use complex algorithms to make investment decisions, they are immune to the fear, greed and emotions that characterize human investment behavior.

But there is a place for both human and robo-advisors. U.S.-based Citigroup Inc. puts this idea in perspective in its March 2016 research report, Digital Disruption: “We see the advent of robo-advice as an example of automation improving the productivity of traditional investment advisers, and not a situation where there is significant risk of job substitution.”

Still, the increase in robo-advice could lead to a decline in the growth rate of the traditional advisor population. Based on U.S. forecasts, Citigroup notes that the number of personal financial advisors doubled between 2000 and 2010, but is expected to increase by only 27% between 2012 and 2022.

Citigroup suggests that the services offered by traditional advisors could be augmented by robo-advice tools, increasing the advisors’ productivity and giving them the ability to serve more clients in more user-friendly and sophisticated ways. Embracing robo advisors will make you more efficient, Hartman adds, giving you time to “build and maintain client relationships, coach clients and keep them on track.”

On their own, robo-advisors may prove to be more attractive to younger, tech-savvy individuals who are in the accumulation stage. They would be an inexpensive solution for clients who do not have the wealth to seek more costly high-touch investment advice. The ability to create their own financial plans or investment portfolios on their mobile devices — as opposed to visiting an advisor in person — would appeal to many young clients.

So, you might attract younger prospective clients by incorporating robo-advisor tools in your practice.

Advisors who serve more affluent clients need not fear robo-advisors. The Citigroup research states: “Higher net-worth or more sophisticated investors will, in our view, always demand face-to-face advice.”

Hartman agrees: “It is still important to meet face-to-face with some clients to discuss nuances that are not clearly brought out by questionnaires used by robo advisors.”

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