LPL Going Robo With BlackRock’s FutureAdvisor

The development at LPL comes one year after Charles Schwab introduced Intelligent Portfolios for clients and nearly a year since it offered Institutional Intelligent Portfolios for advisors. The initiatives amassed $5.3 billion in assets by Dec. 30.

How do industry observers feel about LPL's robo news and its impact on financial advisors?

"I believe that the robo world and the traditional FA world will increasingly merge," said Chip Roame, head of Tiburon Strategic Advisors, in an interview. "This is just another group of FAs getting access to robo technology to offer to their clients."

Michael Kitces, director of wealth management and partner of the Pinnacle Advisory Group, says LPL Financial's news "emphasizes the point that the 'robo' technology is simply functioning as a distribution channel for asset managers and managed money strategies. It's simply a new technology interface for existing money management strategies," he explained in an interview.

Whether it proves financially fruitful or not, Kitces adds, "depends on the ability of LPL brokers to effectively distribute it to their clients, though, which remains to be seen. Not because the technology isn't valuable, but simply because most brokers have no experience in digital marketing to acquire digital clients.

"As I've noted in the past, most robo-advisor solutions will fail to help brokers gain millennial clients, not because of a failure of technology, but because brokers simply have done nothing to establish relevant businesses and marketing channels to reach millennials in the first place."

— Check out Best Full-Service Investment Firms Ranked by Investors: J.D. Power — 2016 on ThinkAdvisor.