As my wife was driving on our way home from from our Memorial Day weekend trip, I took the opportunity to catch up on Twitter after being unplugged in a remote area for a few days. I noticed, via reactions on social media, that Betterment rebranded and industry personalities had taken to trolling the new brand.
I pulled up the site on my phone, expecting some merits to the grumbling, but I didn’t see any of that. In fact, their site is now more on message, self aware, and attractive than before. The discrepancy between what I saw and what other professionals were saying made me think about how people are coping with changes in our industry. Their reactions seemed to be little more than sour grapes.
It reminded me of my recent trip to the dealership to buy a new van for the family. As I made small talk with the salesperson, he said, “I don’t think electric cars will ever catch on.” He might as well have been Charlie Chaplin telling a reporter that talkies wouldn’t last more than three years.
Of course electric cars are catching on. Tesla has forced the entire automotive industry to rethink its approach. Just look at Ford’s recent announcement that they’re no longer just a car company.
But when a new guy comes along and outperforms the established industry leaders, someone is going to make some noise. The old guard is always full of people who say the young upstart is doing it wrong.
Our industry has seen explosive innovation in the last decade. Great tools, platform providers, and technology solutions are helping advisors improve their scalability and efficiency. With these advances come mixed emotions and perspectives on the robo-advisor movement.
Much like Tesla, robo-advisors are at the head of the pack when it comes to adapting to new technologies.
They have an unfair advantage over a lot of advisors in that they’re digital natives. WealthFront, Betterment, SigFig, and others have been 100 percent digital from the get-go.
They don’t have a foundation built on layers of legacy technology, which means they’re more fluid and adaptable. Robo advisors are less than a decade old, yet they’re continuing to reinvent themselves, move faster and bring in new technology (just look at Wealthfront’s new operating system ).
I don’t say all of this to make you despair. Quite the opposite, in fact. I firmly believe in the value of financial advisors. But that doesn’t mean we can’t learn from robos.
Robo-advisors challenge us to do better. Instead of throwing stones when one of them makes headlines, we should be looking at what we can learn from them. What do they do right? What do they do wrong? What do they do better than you? What do you do better?
Advisors should view their digital competition as tools to make themselves better. As Sally Hogshead says, “Different is better than better.” You don’t have to be better than Betterment, but as they get better, you can absolutely use their experience to propel your practice and figure out ways to highlight how you are different.
For example, try using WealthFront to benchmark your practice and what you do. What do they do from a marketing standpoint? How about technology? Or client service standards? If you start benchmarking your business against leading robos, your clients will notice, your prospects will notice, and the next generation will certainly notice too.
How do you measure up? How will you do better? Make yourself someone who can take those standard practices, and add your own unique element on top of it.
For starters, you can hand your back-end over to someone like Orion so you can focus on the one thing robos should never do better than financial advisors: customer service.
There will always be naysayers. But as an advisor, you have two options: You can stay in the stands and jeer, or you can do something. Teddy Roosevelt had strong words for us about this:
It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.
It’s time to get in the ring.