Last year at this time, I wrote a short blog  titled “The Robot will see you now!”  The critical point I was trying to make is that while technology-centered robo-advisor platforms are likely to continue growing in the coming years, they are likely to never replace the value of the personal service advisory model.

I recently came across an interview in Financial Advisor Magazine with Jon Stein, co-founder of Betterment; one of the industry leaders in the rapidly growing robo-advisor space.  The interview was conducted by Mark Hurley; a veteran researcher on the financial advisory industry, who interestingly enough, declared some fifteen years ago that expecting consumers to respond to automated financial advice was a “pipe dream.”

I found the interview to be quite interesting with Hurley, the traditionalist, debating with Stein on the future of the industry.  Stein asserts with great confidence that technology can replace the value of the individual advisor.  He makes the case that you can build judgment into technology because his firm “can take account of everything that goes on (in the life of the client), monitor in real time, compare to what we’re doing for millions of other people and do it better than it’s ever been done before.”

Reading on, he acknowledges the current market for robo-advisors are the early adopters of technology – “the kind of people who were first to get iPhones.”  Betterment presently has more than 100,000 customers, of which only 25% are age fifty or older.  Stein presents the analogy to a self-driving car, where it will begin with the early adopters of the technology, but “it’s eventually going to be everyone.”

I have no doubt that robo-advisors will continue to grow and gain an increasing share of the financial advisory space.  It is an efficient, cost-effective tool for the do-it-yourself investor – much like the onset of online brokerage during the late 1990’s.  However, I hold firm to the notion that an advisor’s wide-ranging knowledge and ability to demonstrate empathy cannot be replicated by an algorithm that can comprehend an individual client’s life experiences, core values, family dynamics or other unique factors essential to providing tangible, quantifiable value added service.