Earlier this year, Schwab Intelligent Advisory, a human-based, robo-assisted financial advice offering was launched at an upfront fee of $300 and a flat fee of $30 a month. Now, Vanguard is getting into financial advice including portfolio management. The Vanguard Digital Advisor, at an asset-based cost of 20bp, is the latest threat to advisers. This is just the beginning. Sooner or later, an asset manager with #recordkeeping and #brokerage subsidiaries will be offering digital advice at $0 or 0bp. Yes, it will be “free”. Most financial conglomerates with a national footprint have a number of pockets. The pocket they are trying to fill to the brim is the asset under management/custodianship pocket. They will do what it takes to attract and retain assets from leakage. This reminds me of the two gas stations at the corners of a major intersection. One station has a car wash, car repair, convenience store, video rental, ATM, and air for tires while the other does not. The owner of this station decides to offer $1 car wash with a free drink. Sooner or later, everyone is going there to get gas and the competitor is toast. Yes, financial #advisers and plan advisers for the masses are in danger; you either get niche-er, get bigger, get more digital, or you are toast!

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