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What is Bionic advisory?

Based on a recent consultancy study, 7 out of 10 people, globally, would welcome robo-advisory services for insurance, banking and retirement planning. This number is on the rise, as the concept becomes more widely available and recognised. Financial advisors are increasingly realising the benefits that the adoption of robo-advisory services unveils, and there is a temptation for them to go full robo, especially with the smaller accounts.

However, the same study also found that two-thirds of the same focus group would still want some sort of human interaction when it comes to more complex financial services and/or for any complaints.

Moreover, although artificial intelligence has been advancing at a rapid pace, conventional wisdom is that there is still a wide gap where machines can truly understand human emotions to provide advice at the level of current human advisors. Scott MacKillop, CEO of First Assent Ascent Management, believed that by going direct-to-consumer automation, without any human interaction, would not allow the advisors to truly understand a client’s risk tolerance or the range of other variables that determines their investment preferences.

Accordingly, the interim point of inflection seems to be that the digitization of wealth should not involve eliminating the traditional financial advisor, but to assist them in the betterment of their relationships with their clients. One of the major fears about the robo-advisory capabilities was the fact that the asset allocation models would drive advisors out of business. The fear of the technology diminishes, according to Meb Faber, CIO of Cambria Investment Management, once the advisors realise that their main value-add is in traditional wealth management and behavioral advisory services - not in the asset allocation.

The core value of the robo-advisory services lies in the automation of back-office tasks. Tasks that are mundane and routine are made more cost and time efficient. Through automation, many pain points, and much time and effort, are converted into actual client aquisition. It allows the advisors to allocate more time to building and maintaining relationships with their clients that would have otherwise been consumed with the routine tasks.

That being said, it is up to the advisor to leverage the robo-advisory capabilities to enhance transparency in the relationship. It is not only about how the robo capabilities can help the advisors, but how they can facilitate the client’s entire journey.

Adding That Human Element

The human touch is crucial in a fully-automated wealth management process, because it is the behavioural coaching that sets advisors apart from robo-advisors. This is the direction that robo-advisory is heading.


It is the synergy of robo-capabilities with the human element that allows for a “phygital” experience. It is the discussions that the advisor will have with their clients on top of the robo-advisory services that will help build the optimal portfolios. Only through this bionic method of advisory, can the advisor get a fully comprehensive understanding of the client’s risk appetite and investment preferences to build the best tailored portfolio on a personal level.


Rutul Gandhi, Associate

Privé Managers

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