- Bill Capuzzi, the CEO of Apex Clearing, said advisers and robo-advisers should aim to offer multiple options for clients to invest their money.
- As different life events happen, people should be able to adjust whether they work purely with an adviser, or with a robo, or somewhere in between.
- Robos and traditional wealth managers are both trying to move in this direction, but the process has been slow.
The future of managing money could be more like picking what you want for dinner at a restaurant than being locked into a specific service for years.
That's the way Bill Capuzzi, the CEO of Apex Clearing, sees the industry evolving. Instead of getting investment advice from either a robo-adviser or a human, clients of financial advisers should have a variety of choices for investing their money.
Included in those services would be a hybrid offering in which clients park their money in robos for a low fee but can get advice from an adviser following life events — like what to do with a large inheritance — for an additional cost.
"Your advisers should be able to move you seamlessly," Capuzzi told Business Insider in an interview last week at FIA's International Futures Industry Conference. "You should be able to move along that chain."
Robos and traditional financial advisers alike are trying to better understand how to evolve. For robos, it's about developing new solutions for clients as their wealth grows and their investing needs become too complex to be managed automatically. Traditional advisers, on the other hand, are working to grab back some of the market share lost to the less expensive and more agile robos.
A recent report by HSBC found that robos in North America needed to manage between $11.3 billion and $21.5 billion in assets to break even. Currently, the only robos in that range are Betterment and Wealthfront, with the majority falling well below the threshold.
Capuzzi cited Betterment, which sells its technology for traditional advisers via Betterment for Advisors, as a good example of a robo trying to expand toward a sliding-scale type of offering.
Traditional advisers, with their higher cost structures, are also trying to figure out ways to more efficiently serve clients with fewer assets who aren't profitable for them, Capuzzi said. Clients with $50,000 in assets, for example, are too small for an adviser to spend a lot of time focusing on.
As a result, advisers are looking to implement robos of their own — to acquire existing robos that aren't making enough money, Capuzzi said, or use robo-in-a-box vendors, such as RobustWealth or Trizic, which allow advisers to quickly establish a robo offering in their platform.
"Over the next five to 10 years, every adviser is going have some ability to provide some electronic solution," Capuzzi said. "The lowest common denominator is you have to have a whole electronic solution."
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