How exactly will robo advisors affect the bank channel? Will they steal enough wealth management business that the bank channel becomes unrecognizable? Or, less drastically, will they carve out a new niche and exist alongside the current wealth management incumbents?
That is just one of the challenges that surfaced in this months cover story by Associate Editor Margarida Correia. She spoke to industry analysts and bankers about the current challenges and how bank advisors are facing them. Banks are definitely eyeing the robos warily, as these new competitors are charging just pennies on the dollar, according to an industry consultant. Others note that the industry sounded the same alarm over discount brokerage firms when they emerged in the 1970s, and they didnt spell doom for traditional advisors. Still others envision partnerships with these new cheaper alternatives.
Another interesting dilemma facing the channel: Banks need more advisors and have the business to support a bigger headcount (some estimates call for one advisor per $150 million in bank deposits, far more than the current average of one advisor for every $250 million). However, one banker Correia interviewed noted that banks understandably are too busy chasing only the best advisors. But that leaves them in a Catch-22 where they cant staff up enough to see real growth.
We also took an outlook perspective with our Careers story, where we offer 21 steps to help improve your work situation. Contributor Rick Rummage delves into the idea that most advisors know what they need to do, but simply lack the follow through. One example: Stop going to lunch with co-workers and go with a client or prospect instead. One more? Get to work a half-hour earlier than usual, and stay a half-hour later. That will create about 260 new work-hours a year to spend on your business.
You could use the extra time to plan out your strategy regarding the robos.
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