Robo-advice is boosting registered investment advisors' client rosters, according to an annual report by the Investment Adviser Association and National Regulatory Services.
Advisors are now serving more than 36.4 million clients – a 22.4% increase over 2015 – with the increase primarily attributable to the rise of automated advice for retirement plan participants and the popularity of web-based and app-based savings and investment models, says the IAA/NRS Evolution/Revolution report.
The annual report scoured data in the Forms ADV filed by advisors registered with the Securities and Exchange Commission, with this year's report including data from 11,847 RIAs, 374 more advisors (or 3.3% more) than last year's report.
"The trend toward automated advice for retirement plan participants, and the growth in new and existing 'robo-platforms' and other web- and app-based investing tools, are major themes in this year's report," noted Karen Barr, IAA's president and CEO.
John Gebauer, president of NRS, added that much of the increase in the number of clients served is due to "an increase in the number of retirement plan accounts and their participants, apparently attracted by advisors offering web-based and app-based investment tools."
The rise of automated advice, he continued, "was well timed to correspond with the retirement savings plans of a generation comfortable with technology and technology based investment tools. Investors are increasingly relying on these automated services and it is likely that technology will continue to play a vital role in the financial industry."
