Whether through regulatory diktat, or technological change, today’s financial advisor must be prepared for a very different and more demanding future.

In recent years, securities regulators have grown increasingly impatient with an investment industry that is highly efficient at extracting revenue from clients, but not nearly as effective at serving their needs. Regulators are forcing firms to be more forthright with clients about how much they are being charged to invest. And, if that doesn’t work, the regulators threaten further action, such as tougher new conduct standards and/or a ban on embedded compensation.

Regulators may have been reluctant to introduce such fundamental changes for fear of unintended consequences, including a disruptive effect on the access to financial services for some segments of the population.

Now, however, regulators have a safety net in the form of technology. The emergence of robo-advisors, which allow even very small investors to build low-cost, diversified portfolios, provides some comfort to the regulators that a policy stance won’t inevitably lead to widespread disenfranchisement of middle-class retail investors.

Financial services firms are already heading in a similar direction on their own. With advances in machine learning, deep learning and other sorts of artificial intelligence (AI), the financial services sector is embracing a future in which rote, rule-based functions will largely be carried out by machines. That’s not to say that human advisors are about to be replaced by robots; rather, the role of front-line advisors is destined to change.

AI-enabled robos may serve some segment of the population, but with little human involvement. Technology could also give full-service advisors better data and decision-making tools that enhance both the quality of service and the value provided to upper-echelon clients.

The fact that the big banks are actively engaged in this sort of research suggests that it’s a question of when, not if, the retail investment business endures its own tech revolution. Forward-thinking advisors should be prepared to adapt.

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