Making Sense of Robo Tools for Advisors

When the first robo advisors appeared a few years ago, they seemed intent on cutting traditional advisors out of the equation. Their goal was to bring basic financial planning and investment management services directly to consumers through the Internet at a low cost.

Members of the advisor community typically had one of two reactions to these intruders. Either they dismissed them or they feared them. Those who dismissed them focused on their long-standing, traditional offering and the fact that they appeared to be targeting smaller accounts and younger generations with little to invest. On the other hand, those who feared them were advisors who had relied too long on their own plain vanilla offering and felt threatened by the robo’s low cost.

Both groups missed the most significant aspect of the robo movement. The robos offered proof to everyone that the client experience and advisory firm efficiency could be vastly improved through technology.

Now that advisors are beginning to see how they and their clients can benefit from robo technology, they are looking for ways to implement it. But the choices can be overwhelming. A multitude of options have cropped up offering what seems like an endless number of ways for advisors to access this new technology. Each one is slightly different.

Sorting through the choices doesn’t have to be a painful process if you have a good framework for analyzing the alternatives. The first step is to understand the various capabilities that robo technology can provide. The next step is to identify the capabilities that will provide your clients with the experience you want for them and the efficiencies you want for yourself.


Before you can decide if robo technology is right for you, and if so, the best way to implement it at your firm, you need to understand what is covered by the term robo-technology. Once you understand the basic components of this technology, you can decide which of those components you would like to employ at your firm.

  • Client Engagement Tools. These tools allow clients and prospects to go to your website and interact with your firm. They include questionnaires, account aggregation tools, portfolio analysis tools, portfolio recommendation tools and financial planning tools.

  • Onboarding Tools. These tools are used to bring a prospect on board as a client. They allow you to automate much of the process and allow a prospect to open an account online without paper forms, “wet” signatures or paper checks. Using these tools you or a client can open and fund an account in minutes over the Internet.

  • Client Portal. A client portal allows your clients to go to your website and view information that might be of interest to them. This information could include account balances, holdings, transactions, performance and various portfolio analytics.

  • Back Office Tools. This category covers a wide range of tools that include portfolio model management, accounting, trading, rebalancing and billing.

At this point you may be thinking to yourself, “Wait a minute. I already have most, if not all of this functionality at my firm. There’s nothing new here. Why do I need robo technology at all?”

You have just identified an important point. Robo technology is not so much about what you do, as it is about how you do it. Robo technology integrates many of the common tasks and processes that you have used at your firm for years. It makes them easier, quicker and more seamless. In the process, it helps you work more efficiently and enhances your clients’ experience.


Another important point that is being missed by most firms is robo technology can be leveraged for serving both next generation clients and high-net-worth clients alike.

Complete Packaged Solutions. These offerings are as close to a full turn-key solution as you can get. They provide a complete set of tools for engaging and onboarding clients, managing portfolios and handling your back office needs. This version of robo can be white labeled so your firm is front and center and the robo provider is essentially invisible to your clients.

This is a great alternative if you like everything included in the packaged solution. However, your ability to customize can be limited. The robo provider’s willingness to make changes in the basic program may be influenced by the size of your firm. So, for example, you may have to utilize a set of standard ETF portfolios offered by the robo provider rather than your own portfolios.

Examples of firms that provide a complete packaged solution include Betterment Institutional and Upside who both offer pre-constructed ETF portfolios, and Trizic which allows you to use your own portfolios.

Front End or Back Office Only Solutions. Some providers only offer part of the robo functionality discussed above. These options work best if you are not looking for a complete package, but instead only want certain functionality that will work together with technology components that you already have in place.

An example of this type of firm is Jemstep. It provides front end robo technology, including client engagement and onboarding tools and a client portal, but does not provide back office tools. Jemstep works well for firms that already have portfolio management tools in place and allows advisors complete freedom to utilize their own investment management solutions.

Other firms that provide slick front-end robo-technology are Oranj, Wealth Access and Circle Black. Each provides account aggregation and analysis tools for advisors and an online client portal. Wealthminder provides online financial planning tools that can be used alone by a prospective client or in consultation with an advisor.

An example of a firm that provides online back office tools is Orion. It provides a client portal, portfolio accounting, trading, performance reporting and billing services, but does not provide client engagement or onboarding tools. Orion’s cloud-based technology has allowed it to integrate with many of the most popular technology applications used by advisors today to create a suite of efficiency tools, enabling advisors to spend more of their time nurturing client relationships rather than dealing with operational issues.

If you like Jemstep’s front-end capabilities and Orion’s back office tools you can have them both. These two firms have integrated their offerings so they work together seamlessly. Orion’s back office capabilities are also integrated with the robo, Autopilot which begins the front-end client experience with a gamified risk assessment powered by Riskalyze.

Fully Customized, Build Your Own Solutions. If you’ve looked at the out-of-the-box robo offerings and still aren’t satisfied, you can roll up your sleeves and customize design your own. This can be accomplished by creating a suite of integrated technology offerings that either you already enjoy using or are on your wish list. The success of this model will be based on choosing a combination of cloud-based front and back end technologies that can “play together” well.

For example, you can choose to form an integrated suite of one of the available best-in-class client portals, an e-signature company, your custodian and a robust portfolio management system. Depending on how elaborate your design is, in some cases you may need to hire a programmer to help pull it all together.

Advisor Software is an example of a technology hub that provides the ability to custom-design your own robo offering. It has a wide variety of APIs (application programming interfaces) to choose from that can be used as building blocks for your solution. Think of each API as a connection for each piece of your personal robo puzzle.

For example, Advisor Software offers a risk tolerance questionnaire API, a portfolio analytics API, a performance analysis API, a rebalancer API and so forth. You select from the Advisor Software API menu and create the robo capabilities you want.

Tradier is a firm that is primarily focused on providing brokerage APIs to firms that want to develop online trading capabilities. But it also offers advisors the ability to build automated account opening, account funding and certain client portal capabilities into their websites.

Building your own program obviously requires more thought and planning than buying an off-the-shelf solution. But it allows you to truly design your own robo from the ground up. It will take more time and effort, but the pay-off is you get exactly what you want.

It is important to understand the nuances each option offers. Each one offers a different set of capabilities, look and feel, time-to-market and cost structure. Identify the features and functionalities you would want to create the best solution for you and your clients. Then match your needs with the model and offering that is the best overall fit for your firm.

Deborah Fox is CEO and founder of Fox Financial Planning Network.

This article was originally published on

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

© 2016 SourceMedia, Inc. All rights reserved. Content originally published in Financial Planning. No further distribution, reuse, or republication permitted without the written consent of SourceMedia Inc. For more from Financial Planning, go to:

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.