Part 2: The Bionic Advisor Toolkit

(Disclosure: I’m not receiving any remuneration to be talking about any of these firms; I share because I care. Your results may vary.)

So the last time I wrote on this subject I mentioned the issues you need to understand when considering Robo-advisors without the human touch and how to compete. Then I was rudely interrupted by a pseudo-cat-fight between, Weathfront CEO, Adam Nash and Schwab, in which I took time to point out the lies half-truths involved in Wealthfront’s narrative about Schwab’s robo-product (in very, very long & detailed fashion — sorry about that, but that stuff bugs me).

And then… my computer crashed and I lost a really long beautiful post about what your next steps as an advisor should be to become bionic. That was last week and I’m a man of my word — so instead of trying to recreate all of that flowery prose, I’ve created a short PDF for you to use as a reference guide to build your systems into a robo-ninja.

But before we begin, as dangerous as it may seem, I’m going to assume some of the following:

  1. You’re an Independent Registered Investment Advisor
  2. You’re dedicated to being awesome to clients
  3. You understand and appreciate technology

Okay, let’s begin….


So, you’re going to need some tools.

You’re going to launch a website that will allow people to see your value proposition, your ideas, your process & purpose firsthand — and maybe they’ll want to invest with you as a result.

They’ll want to work with you, because after using your site and your process, they’ll realize you might have something to offer them. They’ll want to push buttons to review things 24/7. So, I’m going to show you how to make that a reality.

You’re going to need to make some changes probably. And, maybe the most important thing to consider, first, is where will the money be kept? There’s really only one answer right now. If you’re going to create an online robo-experience, you are going to be using TD Institutional as your custodian. The history behind this is short and sweet. TD went the “Android” route (open source) “We want to own the whole stable in this horserace.”

Schwab went the Apple route. They decided they’ll build it themselves in their walled garden. The problem is they aren’t Apple. And their robo-offering isn’t anything I’d consider excellent. I love them for their traditional services and maybe their robo will be good enough for you, or good enough some day, but I’m looking elsewhere for my robo-custodian. Some advisors I’ve been talking to also worry/think Schwab’s robo-offering is a trojan horse competitor; it’s possible I suppose. Either way, I just don’t think their 1.0 Robo-offering is that great. Moving on…

There’s also Fidelity. Fidelity shares Schwab’s walled garden approach, but partnered with Betterment for RIAs to offer Betterment’s online investing platform as a white label product. It’s not a terrible product, but for the life of me I can’t figure out why any advisor would ever partner with Betterment. (See Betterment’s Blog Post: Financial Advisors Are Bad For Your Wealth). And even though another early critic (and friend of the blog) Michael Kitces has buried the hatchet and sealed a deal with Betterment for his new CFP network (not a knock on Michael at all), I personally will probably never trust Betterment. Why? I think fintech guru, Bob Veres, encapsulated it best…

That blog was eventually modified, with an explanatory disclaimer at the bottom, after Josh Brown (who calls himself “The Reformed Broker” on his own blog) and Mike Alfred from Brightscope pointed out that the brokers’ behavior would have been just as abhorrent to fee-compensated advisors as to Betterment customers. But the company’s website still makes some exaggerated comparisons between Betterment’s service model and a hypothetical “Investment Advisor:”

Minimum balance?

Betterment: not here. Investment Advisor: how deep are your pockets?


Betterment: 0.15%-0.35%. Investment Advisor: An arm and a leg… at least 1%.


Betterment: Super simple. Investment Advisor: And you thought relationships were complicated.

Access to Money?

Betterment: Anytime. Investment Advisor: With a fight.

BTW– that incendiary blog post has now since been quietly deleted from Betterment’s blog, and the messaging Bob was citing on their site has conveniently been polished away, now that they’re also partnering with advisors.


Betterment’s image of advisors

To me, you can’t have it both ways — a company culture that publishes these things (and obviously believes them because of the numerous occurrences)… then a couple of short years later wants to offer a product to the same professionals — Yeah, No.

I simply can’t recommend any of my advisory brothers and sisters consider Betterment.  I’m actually supposed to talk to Jon Stein next week.  I’ll listen to what he has to say — and maybe I’ll bury my hatchet too (it’ll be hard to get past the pigs flying irony of this situation) — either way, I’m open to hear what he has to say.

That being said — more directly, I can’t recommend Betterment’s RIA service because it’s actually really expensive. You’ll be one of their more profitable customers at 25bps and everything I’m proposing is cheaper and scales, and is arguably more robust in the important areas that will benefit a client most. So, the because of the costs, and Betterment’s history with Advisors, and Fidelity’s more closed approach — they’re not an option in my mind right now. So, the only game in town right now is TD.

Now what?

The Bitter Red Pill

Let’s face it. Your advisor website sucks and the robo sites don’t. What quickly became the 2.0 business card of our industry, just as quickly is no longer relevant. People don’t want to submit an email form to be contacted by you. They want to go to your site, learn how you do things, what you charge, how available and qualified you are to service them… find answers, specific answers, about how you’ll do things, and how it will be better than what they’re doing now — and begin working with you  if they feel like you’ve delivered enough on this first pass.

So — here’s what you’re going to need to accomplish that:

Becoming a bionic advisor

Read More// Part 1: Your Guide to Understand (And Compete With) Robo-Advisors 



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  1. Pingback: Your Guide to Understand (And Compete With) Robo-Advisors | I ❤ Wall Street.

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