In Perspectives

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.

Legacy Trust and Your Right to Financial Privacy

At Legacy Trust we have established policies and practices that respect the financial privacy of all individuals who use our trust company. We believe it is critical to comply with the laws and regulations designed to secure your financial privacy. Your relationship with us as our client is very important to us, and we want you to understand our policies and practices about handling your information.

This Policy applies to you – This Policy applies to our relationships with individual clients who inquire about or obtain products or services from us for personal, family and household purposes.

Strict security measures – We take the security of information very seriously. We have established security standards and procedures to prevent access to client information. We maintain physical, electronic and procedural safeguards to guard client information.

Limited employee access – We have established procedures to limit employee access to information to only those employees with a business reason for accessing such information. We educate our employees about the importance of confidentiality and client privacy. We take appropriate disciplinary measures to enforce employee responsibilities regarding client information.

Why we collect information – We collect information about you to:

  • accurately identify you;
  • protect and administer your records, accounts and funds;
  • help us design or improve our products and services;
  • understand your financial needs;
  • save you time when you apply for new products and services; offer you quality products and services; and comply with certain laws and regulations;

We collect information – We collect and maintain your personal information so that we can provide investment management and other services to you. The types and categories of information that we collect and maintain about you include:

  • Information we receive from you to open an account or provide investment advice or other services to you (such as your home address, social security number, telephone, financial information and investment objectives).
  • Information that we generate to service your account or from our transactions with you (such as account statements and other financial information).
  • Information on your transactions with nonaffiliated third parties.

We have established procedures so that the financial information we collect is accurate, current and complete. We are committed to work with you to promptly correct any inaccurate information.

Our selective sharing of information – In order for us to provide investment management and other services to you, we do disclose your personal information in very limited instances, which include:

  • Disclosures to nonaffiliated companies as permitted by law, including those who help us service your account (such as providing account information to brokers and custodians).
  • Other limited disclosures as permitted by law, for example, required reports to government entities.

We do not share your information with third parties for marketing purposes. We do not sell your information.

Former clients – If you end your relationship with us, we will continue to adhere to the privacy policies and practices described in this notice.

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USA PATRIOT Act

Important Information About Procedures For Opening A New Account

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.

What this means for you: When you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

We apologize for any inconvenience this may cause; however, federal law prohibits us from waiving these requirements.

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