Headlines today paint a bleak picture of the future of the financial advisor model as more people adopt robo-advisors for their investment needs. The narrative is reduced to a high stakes, winner takes all battle for the very future of investment portfolios, pitting man versus machine in some sort of post-apocalyptic dystopian financial world.

But could the robo-wars be won without firing a single shot? If we look at the history of technological disruption in finance and professional services, I believe we’ll see financial advisors allying with robos to join together in the quest for efficiency.

Consider a comparison to the launch of TurboTax in the late 1990s. At the time, TurboTax was said to disrupt the CPA industry. Why would anyone pay an accountant to submit their 1040 every year when automated software is available to do it for you?

TurboTax did not become a great disruptor of the accounting profession but rather a great tool. Today accountants use TurboTax to file their clients’ returns. Why is this? Because we are all just a service provider in the investment stack where investor is at the top. We can run complex computations using super computers, but in the end it is about servicing the investors in the most efficient and transparent manner.

Ripe for Disruption

Financial advisors today should see robo-advisors in much the say way: a service provider to their business to assist with the parts of investment allocation that are ripe for disruption. For some advisory clients, the investment needs may be relatively simple and not worthy of an advisor’s time. If a sample investor is 30 years old without a family to consider, an allocation to all-stock index funds and bond portfolios may cover most of their investment needs. In this example, a complimentary robo-advisor offering could help form a relationship with a client that may otherwise head to Google and leave their financial planning up to the company with the greatest SEO.

The example relationship may not return much at the start but what happens when the individual receives an inheritance? Or receives a promotion to an executive level job with a comprehensive compensation package incorporating salary, bonus, deferred compensation, stock options, warrants and other financial products?

It is when the client’s portfolio becomes more complex that the value of a financial advisor comes forward. How best to execute a stock option when I’m a 12b-1 employee? Can I use a SDBA window to allocate my 401(k) portfolio? What is the best estate planning strategy for my family? These are the sorts of questions where a financial advisor can show expertise that goes beyond asset allocation and investment strategy. The recommendations offered in situations such as these consider investment objectives, tax strategy and the unique life factors that require considered advice. Perhaps most importantly, the financial advisor acts as the trusted confidant to assuage fears arising during periods of short-term volatility, reminding the emotional, human client to stick with a plan to meet long-term objectives. (For related reading, see: Robo-Advisors and a Human Touch: Better Together?)

The Human Component

This human component is the most crucial role of the advisor. Individuals already have the knowledge and tools at their disposal to make the most informed decision buying or selling a particular stock or to review the track record of a particular fund.

Twenty years ago, when accountants were still concerned about getting a postmark date of April 15 on tax returns, these functions were largely the role of a financial advisor. But as the internet made information freely available, the advisors changed their business model to adopt accordingly. Largely gone are the days of commission-based advisors encouraging clients to buy and sell stocks to boost commissions.

Advisors today are largely paid a set fee or percentage of total assets on an advice offering, a model dependent on providing the most relevant and useful information about how best to manage investments for a stated objective. Sometimes that information is financial, sometimes it is emotional, either way it is built of a foundation of trust between advisor and client. (For more, see: How Human Advisors Are Dealing with Robo-Advisors.)

A Threat to Traditional Platforms

If any group is under threat from the increased adoption of automated financial advice it is the online brokerages, not the specialist financial advisor. Traditional platforms may become displaced as a destination for buying and selling stocks and the tech-savvy sign up for robo-advisors managing their money via an app.

Platforms that make money by making individual investors play the investing game and losing on average are the ones who are most likely to lose against the robo-advisory movement. Rather than run counter messaging to disparage robo-advisors, or continually reducing their fees to zero, these platforms are building robo-advice into their service offering.

It is no surprise that most brokerages are the first to launch their own "robo" service. (And that they are often branded as "intelligent," "smart’ or "robo".) They are essentially offering one of the preset portfolios as recommendations, then setting up automatic rebalancing at regular intervals to ensure that the asset allocation is in line with the stated objectives.

Does that sound like a threat to healthy, thriving practices, built on decades of experience in dealing with complex financial situations that may require the combination of tax advice, legal representation and financial know-how? It does not and it isn’t.

So why do so many advisors today shy away from using more robo-advisor tools? There is no good reason. Financial advisors are in a competition with each other and adopting better tools in this marketplace is not a choice. It is a necessity. Taking the best parts of robo-advisory and incorporating that helps them become an efficient, transparent, thorough offering to their clients. (For related reading, see: What Advisors Can Learn From Robo-Advisors.)

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.