Robo-Advisors Make You Nervous? Here's How to Adapt

Written by: Jay Gragnani, Dorsey, Wright & Associates, a Nasdaq Company

In The Martian , Matt Damon’s character leveraged science, technology, and every single resource he had to survive. From growing his own food and creating water, to building his own tools, to figuring out how to communicate with NASA to get home alive, his ability to adapt to constant change saved his life.

While it may feel dramatic to compare a lost astronaut’s circumstances to the current environment in financial services, it may feel just as threatening to advisors facing the recent onslaught of new regulations and emerging technologies. Perhaps the best example of this perceived threat is the industry’s reaction to robo-advisor platforms. Instead of seeing this advancement as a powerful resource and taking advantage of the opportunity, many advisors are paralyzed by fear. Today’s industry headlines continue to call out robo-advisors as a major threat to advisory practices. But are they? Or are they simply the next step in the evolution of financial services?

In my 10+ years at Dorsey, Wright & Associates , a Nasdaq Company, I’ve seen how technology can change things for the better. In truth, if we hadn’t adopted technology to support our business, it would look nothing like it does today. In the early days of Dorsey Wright, Point & Figure charts were calculated and updated by the analysts – by hand. Hundreds of stocks every single day were updated in this manner. In the mid-90’s, with the launch of the website, the Point & Figure charts were able to be updated and calculated by computers. The capacity went from hundreds of charts to thousands of charts to be updated and maintained every night. Then cloud-based technology came to the rescue. The rooms full of mainframe computers vanished (remember those?!), and we were able to escalate our efforts at a rapid pace.

Using this new technology, we have been able to exponentially increase the capacity for relative strength chart calculations as well as increase the speed at which these updates are completed. On the DWA Global Technical Research Platform we’re now able to automate Point & Figure charts and rankings for more than 7 million securities and instruments on a daily basis . In 40 sectors. In 77 countries worldwide. And because of our use of the DWA Platform, our team now has more resources without adding many more people. Talk about change! As an ETF strategist and an index provider, we have used technology to help advisors stay on top of change, not lag behind it, and to leverage it to their full advantage.

For me, it’s easy to see how powerful technology can be, partly because I witness its impact every day. If we were to receive 100 times the number of requests tomorrow than we did today, there would be no impact on our resources or our ability to do our job. The cloud gives us the flexibility to ramp up—and ramp down—to match the needs of the business. For us, technology has been the driving force of change, and we wouldn’t be where we are today without it.


As an adaptive advisor, what would you give to have a solution that could help service your clients 24/7 and free up your time to add greater value where it’s needed most? How much value would you place on a marketing campaign that would attract the attention of next-generation clients—without requiring extra effort from your staff? Here are just a few quick examples of workflows and technology that are available now to help you build a better, stronger practice:

  • Automated Portfolio Construction : These workflows streamline portfolio construction by enabling you to screen universes of securities and investments based on technical analysis. Holdings that fall out of favor based on the analysis can be highlighted for further investigation or automatically sold and replaced by a higher-ranked holding.
  • Automated Portfolio Management Triggers : Automating parts of your asset allocation workflow can help you make recommendations that are backed by objective analysis. While there are plenty of ways to tackle this goal, one of the first steps is to automate changes in asset class and sector leadership to help inform and drive your allocation decisions.
  • Investment Ideas Mining: Finding the time to identify and communicate investment ideas has never been easier than it is today using cloud technology. You can set up alerts when individual securities, portfolios, or instruments such as an ETF hit a major milestone; weed out ideas that fall out of favor; or segment your ideas by sector, geography or risk tolerance. The possibilities are almost endless.
  • Mobile : Your clients and prospects expect mobile access and communication. While older clients may limit their mobile use to viewing account information and receiving emails, the next generation expects much more: from graphical portfolio reports to immediate text alerts. If you aren’t already adopting mobile technologies, don’t waste another minute.

  • In The Martian, Matt Damon knew that only two things could save him: his ability to adapt to his circumstances, and his ability to make the best possible use of every resource he had on hand. For advisors, the same is true. Now is the time to get excited about how technology can evolve your business. Adapt as quickly as you can. Explore the possibilities. And do whatever it takes to create a better future for yourself, your practice, and your clients. By embracing all technology has to offer, you’ll not only gain the power to attract the next generation of clients to your practice, but you’ll also have the resources you need to deliver better, faster service to retain them for years to come—all at a lower cost to you than ever.

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    To learn more the DWA Technical Research platform, click here to take a free 21-day trial . To learn more about Relative Strength and the Dorsey Wright Relative Strength strategies, download the whitepaper Point & Figure Relative Strength Signals , or contact us here .

    The relative strength strategy is not a guarantee. There may be times where all investments or asset classes are unfavorable and depreciate in value. Past performance is not indicative of future results. Potential for profits is accompanied by possibility of loss.
    The information contained herein has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. Accordingly, investors should not act on any recommendation (express or implied) or information in this material without obtaining specific advice from their financial advisors and should not rely on information herein as the primary basis for their investment decisions.