Three-Quarters of Broker-Dealer and RIA Executives See Digital Advisors as Here to Stay, But Not Able to Replicate “The Human Element,” According to Fidelity® Poll

Contrary to the Popular Notion that Digital Advisors will “Replace” Traditional, One-to-One Advice, Many Firm Leaders Plan to Embrace the Growing Trend to Help Bring “Advice” to the Masses

BOSTON – A new Fidelity® Institutional poll,i taken at the company’s annual Executive Forum client event, found that nearly three-quarters (74 percent) of broker-dealer and registered investment advisor (RIA) firm executives see the emergence of digital advice models – online platforms that provide “virtual” financial advice or low-cost investment management services – as a positive industry trend that is here to stay. However, 54 percent of executives polled also felt digital advisors cannot replace the human element of advice. With 66 percent of mass affluent investors preferring a face-to-face relationship with an advisor,ii firms have an opportunity to blend the best practices of the digital advice model with human touch to prepare for the next generation of investors.

Executives' Views of Digital Advisors

“Imagine the impact digital advisors will have if firms are able to reinforce the value of the human element with the technological solutions these models offer,” said Michael Durbin, president, Fidelity Institutional Wealth Services. “This formula has the potential to be what the industry needs to support a broader segment of mass affluent investors efficiently and with scale.”

“Overall awareness of digital advice solutions is low right now, with our poll showing that only 13 percent of executives are feeling very informed about the models. So, education is the first step,” said Sanjiv Mirchandani, president, National Financial®, a Fidelity Investments company. “Firm leaders should evaluate the wide range of new models emerging and identify which elements may be useful to embed into their advisors’ practices.”

While the firm leaders polled agreed that the impact of these new models will equate to positive changes in the advice industry, they shared reservations regarding greater confusion about advice options and increased regulatory scrutiny. As one respondent noted, “Hopefully, regulators will be able to effectively oversee these new models.” The executives polled saw digital advisors as having the greatest impact on the availability and cost of advice for mass affluent investors and raising investor demand for technology. When asked for one word to describe digital advisors, executives described the new models as “needed,” “complementary,” but with the potential to be “disruptive.”

Executives' Perceptions of the impact of digital advisors

Executives' descriptions of Digital Advisors

According to the poll, many executives are already incorporating some of the digital advisor best practices and solutions into their businesses in order to engage the next generation of investors. Executives reported that they are using technology to drive collaboration and ease of doing business (52 percent), using lower cost investments in portfolios (46 percent), offering do-it-yourself tools for goal planning, asset allocation, etc. (22 percent) and lowering minimum asset levels (20 percent).
The 16th annual Executive Forum was held May 4 – 7th in Orlando, FL. The event was attended by more than 300 executives, most of whom are clients of Fidelity’s custody and clearing units, which administer more than $2.7 trillion in combined assets.iii

About the Executive Forum Poll
The Fidelity 2014 Executive Forum Poll was conducted May 4-7, 2014. Ninety-two Fidelity clients attending Executive Forum completed questionnaires at the event. The results of this poll may not be representative of all financial advisors meeting the same criteria as those surveyed at the Fidelity 2014 Executive Forum.

About Fidelity Investments
Fidelity Investments is one of the world’s largest providers of financial services, with assets under administration of $4.7 trillion, including managed assets of $1.9 trillion, as of April 30, 2014. Founded in 1946, the firm is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and many other financial products and services to more than 20 million individuals and institutions, as well as through 5,000 financial intermediary firms. For more information about Fidelity Investments, visit

 i The Fidelity 2014 Executive Forum Poll was conducted May 4-7, 2014. Ninety-two registered investment advisor and correspondent broker-dealer Fidelity clients attending Executive Forum completed questionnaires at the event. The results of this poll may not be representative of all financial advisors meeting the same criteria as those surveyed at the Fidelity 2014 Executive Forum.
ii 2013 Fidelity® Millionaires of Tomorrow Study was an online, blind study conducted by Bellomy Research, an independent firm not affiliated with Fidelity Investments, from May 16, 2013, to May 29, 2013. It was focused on understanding investors’ attitudes, behaviors, and preferences related to investing, wealth management, and advice usage. It was held among a target sample of 813 respondents.
iii As of December 31, 2013.

Fidelity Investments does not provide advice of any kind. You should conduct your own analysis, review, and due diligence based on your specific situation. You are responsible for evaluating your own specific needs and making appropriate decisions. Those decisions may be based on these and other factors you deem relevant. The information provided herein is not meant to be exhaustive of all possible options you may consider.

The content provided herein is general in nature and is for informational purposes only. This information is not individualized and is not intended to serve as the primary or sole basis for your decisions as there may be other factors you should consider.

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Fidelity Institutional Wealth Services provides brokerage products and services and is a division of Fidelity Brokerage Services LLC. National Financial is a division of National Financial Services LLC through which clearing, custody and other brokerage services may be provided. Both members NYSE, SIPC.

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