The Fintech Revolution and the Changing Role of Financial Advisors

Abstract

The purpose of this study is to assess the relationship between traditional financial advisors and the increasing use of robo-advisors, in the context of the financial technology (fintech) revolution that we are witnessing now. Contrary to the doomsday outlook of many, these services complement each other and therefore are inclusive. A growing trend, however, is the democratization of the use of fintech in an increasingly varied realms associated with personal finance. While those with higher incomes and more wealth tend to pay for the services of traditional advisors, clients with lower levels of income and wealth utilize robo-advisors more often. Continuous advancements in fintech provide a somewhat customized service but the robot’s lack of ability to manage certain types of investments and integrate intangible yet critical human factors into the assessments limit the effectiveness of these tools, at least currently.