Good news: investors want to deal with humans that leverage technology, not a pure technology-driven financial offering. They also prefer advice (beyond investments) over “going it alone.” These were some of the findings in a Vanguard research paper called “Quantifying the investors view on the value of human and Robo-advice,” published last month. 

The research is good news—for them. Vanguard’s Personal Advisor Services, which provides human advisors coupled with technology and lower cost investment implementation, ended the year 2020 with about $212 billion in assets under management, according to Investment News, “Top 5 largest robo-advisers by AUM”, March 22, 2021. The research paper confirms Vanguard’s business proposition as a virtual advisor (not a pure robo), automating their investment management and focusing on scale. The paper also notes that “preference for advice type is not dictated by client age or wealth.” 

What do you see?

What I saw in the paper was the difference between advice type (human vs. robo) and not the quality of advice. I saw a lot of “advice” but it was generic and just touched on the basics. The quality of advice depends on hyper-personalization and can deliver deeper value to clients, drive faster growth for the advisory firm, and stay well ahead of the mega teams and digital providers that continuously market their services to your clients.

How advisors can use smart scale

But how do you create hyper-personalization and still grow your business? As my colleague and SEI’s head of practice management, Shauna Mace once said: “smart scale.”

Smart scale is service that focuses on meeting the unique needs of a niche audience. It involves creating partnerships that give the impression of a bigger firm without the infrastructure cost or overhead. Smart scale is leveraging technology, like your CRM, to identify and act on micro-moments or date-specific milestones. It means using focused marketing that addresses the concerns of your target audience, rather than general investment and planning topics. Advisors who use smart scale often use journey maps to understand the roadblocks or sources of friction for your clients. 

Game-winning advice

Please don’t get me wrong, I loved the paper, as did many others. It’s important in understanding the psyche of the investor and how opportunities can be created. But as I have said many times, if you are using a third-party research paper to justify your value to a client, or you’re forced to communicate your value in basis points, you’ve already lost the game.

The good news is that investors are looking for human advice that leverages technology. The best news is that independent advisory firms are poised to deliver it in a hyper-personalized way.

If you want to dig deeper into specialization, partnerships, and technology, email me at

A basis point is a term used in finance to refer to an increment of 0.01%

Investing involves risk including possible loss of principal. 


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