Virtual Advice Is The Real Threat to Financial Advisors


If you’re worried about robo advisors, then guess what. McKinsey & Co. says you’re getting all bent out of shape over the wrong thing.

Don’t you just hate that?

Now here’s what you should be worried about, according to the McKinsey report: Virtual advisors. They’re more likely to eat your business and spit it right back out.

Vanguard and other RIA custodians are offering financial planning advice via teams of sophisticated advisors operating from central locations. Investors can access them by phone, video and email virtually anytime they like. For example,  Vanguard Personal Advisory Services offers investment advice including financial planning for 30 basis points  to investors with portfolios of $500,000 or more. Next year individuals with just $100,000 or more will qualify.

“The new model—’virtual advice’—retains the high level of personal service that most consumers value from their financial advisor, but leverages the connective power of digital communication (e.g., videoconferencing, co-browsing) to deliver this service from a distance.”

Michael Kitces, partner, Pinnacle Advisory Group, explains:

…Vanguard has come up with a price point for planning services that is attractive. “It’s low enough for advisors charging 1% to have to explain what they do that is valuable” to warrant the difference of 70 basis points over Vanguard.

So, if you want to worry, go ahead. Stress out over virtual advisors. But the truth is, worrying never helped. Advisors with a broad-based business model and deep client relationships have nothing to fear.

Photo: Nathan Rupert

About Mark Elzweig

I am an executive search recruiter with an inside track on financial advisors, the asset management industry, and Wall Street. My work has appeared in numerous publications including On Wall Street,AdvisorOne, and Fund Fire. Journalists regularly seek me out, so you catch my bon mots in The Wall Street Journal, Research Magazine, Reuters, and more. You can follow me on Twitter @elzweig or you can reach me directly at 212-685-7070 or
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One Response to Virtual Advice Is The Real Threat to Financial Advisors

  1. mking41 says:

    Very good Mark,

    Sent from my iPhone


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