If you can't beat 'em, join 'em.  That seems to sum up the attitude of brick-and-mortar wealth management firms towards robo-advisors, those automated, algorithm-based investment services that have rocked the financial advisory universe since they became publicly available in the 2010s. Increasingly, financial institutions that serve retail investors are designing their own robo-advisors, hoping to compete with standalone digital services like Wealthfront and Betterment.  In November 2017, Wells Fargo joined the ranks of such venerable investment companies as Bank of America, Vanguard and Charles Schwab with the launch of a digital advisor, Intuitive Investor.

How Intuitive Investor Works

Created by technology vendor SigFig, the new platform is accessible to all Wells Fargo brokers and clients and fully integrates with Wells Fargo's online and mobile banking services. Intuitive Investor requires a $10,000 minimum investment (which is higher than several competitors) and carries a .5% annual advisory fee (also a tad higher); if clients link the account to Portfolio by Wells Fargo, a premium checking account, the firm knocks 10 basis points off the fee. There are no transaction expenses or commissions.

The service works like this: Investors answer eight questions used to determine their risk tolerance, goals and time frames. They are then presented with a recommended portfolio, one of nine designed by the platform, whose strategy ranges from aggressive growth to conservative income. Wells Fargo claims the portfolios, which are comprised mainly of eight to 14 exchange-traded funds (ETFs), are monitored and adjusted (if need be) daily. If they ever need to hear a human voice, clients can also speak to professionals from Wells Fargo Advisers, the company's wealth management division. Currently, Wells Fargo has more than 15,000 advisors with $1.4 trillion in client assets, according to its latest earnings report.

The Rise of the Robo-Advisors

Robo-investing platforms are becoming increasingly profitable for the big players in wealth management. According to an article in Financial Planning, Charles Schwab’s robo recently claimed over $8 billion in assets under management (AUM). That same Financial Planning article claims that only 5% of investors have used an automated advisor, which suggests there’s room for the automated investment technology to expand. In fact, despite the platforms' rapid growth – and the fact that many many registered investment advisors (RIAs) and financial planners are already using automated platforms in their practices – many investors remain completely unfamiliar with the robo-advisory model.

The big advantage are the cheaper costs associated with robo-advisors, an increasingly important issue for consumers: Along with lower management fees, robos tend to invest in low-cost vehicles. The ETFs in Intuitive Investor's portfolio average an expense ratio of .15%. The transparency offered by the automated platforms – clients can log on from anywhere to view their platforms – is a plus too.

The Bottom Line

Wells Fargo's Intuitive Investor is technically a hybrid robo-advisor since it allows clients access to human advisors. Still, it represents an old financial dog learning new investment tricks – and making a bid for a younger, tech-savvy clientele of Gen X and Millennial investors, who value low costs and transparency, and who aren't afraid of automated systems.