Salvatore M. Capizzi, CEPA, CBDA, is Dunham's Chief of Sales & Marketing and a 2026 Wealthies CMO of the Year Finalist. His work focuses on retirement planning, emerging trends for financial advisors, and advanced tax, trust, and estate strategies.
Robo-advisors were supposed to replace financial advisors. A decade later, Schwab, Goldman Sachs, UBS, Fidelity, Vanguard, and JPMorgan have all pulled back from pure-automation models and added humans back in. AI is facing the same test, and the answer is the same.
What You Need to Know
Schwab, Goldman Sachs, UBS, Fidelity, Vanguard, and JPMorgan have all scaled back or restructured their robo-advisor platforms since launch, most by adding human advisors back on top.
The algorithm handles portfolio construction well. It cannot notice a client's life has changed unless someone tells it.
A 2024 FPA and Allianz study found 91% of planners discuss the fear of running out of money with clients, but only 28% of clients recall having that conversation.
The bigger risk from AI is not replacement. It is client amnesia. If clients forget advice you already gave, AI will happily give it to them again next year, and they will remember the tool - not you.
The fix is documentation. Put major planning conversations in writing so the advice stays attached to your name.
I read something recently that made me smile. As a Mets fan, I have not smiled much this season.
A little over a decade ago, robo-advisors arrived on the scene, and many of the financial advisors I spoke to believed that their business was under attack and that algorithms, a phone app, and emails would replace them.
Just like a pair of rabbits left alone with romantic music playing, it seemed as if robo-advisor firms were popping up everywhere.
I confess that I opened four different robo accounts to “keep an eye” on what they were doing. The first thing I noticed was that the account opening was easy. I answered a handful of questions, and a computer built the portfolio, rebalanced it, and harvested the tax losses, all without a human anywhere in the process.
How Did the “Get Rid of Humans” Experiment Go?
Well, we have seen how that experiment turned out.
Charles Schwab recently announced it is retiring features of its Robo-advisor1 channel. Schwab was one of the biggest advocates of automated investing, so this is not an insignificant announcement.
Goldman Sachs sold its Marcus Invest platform to Betterment.
UBS walked away from its planned acquisition of Wealthfront3.
Vanguard split its model into two, keeping a low-cost automated tier for simple situations and building a second tier that pairs the same algorithm with a dedicated CFP, priced higher and requiring a much larger account, which is not what a firm does when it believes software alone4 is the future.
Fidelity did the identical thing. Once a Fidelity Go5 account crosses twenty-five thousand dollars, unlimited coaching calls with Fidelity advisors, many of them CFP certified, get layered directly on top of the automated portfolio.
JPMorgan shut down YouInvest6, its original standalone robo platform, completely, then turned around and built J.P. Morgan Personal Advisors, a hybrid service pairing a CFP credentialed advisor with automated portfolio management. JPMorgan did not walk away from technology. It walked away from technology without a human attached.
Every major firm in this space ran the same experiment, a pure algorithm with no human, and every one of them reached the same conclusion. The algorithm was not enough, and their clients wanted credible humans.
The human is what clients pay for once their financial life gets complicated. The next time a prospect brings up robo-advisors to shop your fee, you now have Schwab, Vanguard, Fidelity, UBS, and JPMorgan as your evidence, because all tried to prove you unnecessary and all ended up hiring more of you instead.
Why Technology Without Human Advice Falls Short
I have been in this business for a long time, and I can tell you where I believe an algorithm fails.
An algorithm can build a diversified portfolio for a thirty-five-year-old using a lump sum and a seven-question survey, and it will do so competently. What it cannot do is notice that this same client, five years later, just inherited a business from a father who never wrote a proper succession plan, and now has siblings who disagree about whether to sell it or run it.
Nobody updates a risk questionnaire to capture that. A human advisor asks about it at the next meeting because they remember there was a father, a business, and a strained relationship between two siblings, and asks how everyone is holding up.
An algorithm certainly cannot manage the client who calls you at eight in the evening because the market dropped four percent that day, and they are ready to sell everything.
That client does not want a rebalancing email notification.
They want to hear your voice tell them that this has happened before, that the plan already accounted for a day like this, and that you are not going anywhere. That phone call, repeated over the years, is the entire business. It is also the one thing no platform has ever figured out how to replicate, because it is not a service.
It is a relationship.
Will AI Replace Financial Advisors?
I am hearing the same question about AI that was once asked about robo-advisors.
Here is my view, and more importantly, here is what to do.
Talk to your clients about that family meeting where an adult child has a substance abuse issue, and the parents were deciding how much control to hand over in a trust. Tell them how AI can indeed explain a spendthrift provision perfectly.
However, it cannot sit in that room and read the tension between the two parents who disagree about how much to trust their own son. That is the meeting to bring up with your client when the AI question comes up as a real example from your own practice.
AI will absolutely change how you work, and you should let it. It will spreadsheet faster, calculate faster, and find options you might miss, and the advisors who use it well will outwork the advisors who ignore it.
But use it as leverage, not as a replacement for the parts of your job that actually matter. Let it handle the mechanics, so you have more time for the conversations only you can have.
The Bigger AI Risk: Client Amnesia
Research combining an FPA survey7 of 399 planners with Allianz’s 2024 Annual Retirement Study found a striking communication gap.
While 91% of planners said they were likely to discuss the fear of running out of money, only 28% of investors said they had discussed it with an advisor. And while 94% of planners said they were likely to discuss retirement-income distributions, only 32% of investors said they had had that conversation.
Put simply, there is no gap in what you are saying. It is a gap in what your clients retain, and it is entirely within your control.
For instance, when was the last time you asked a client to repeat back, in their own words, what you agreed on regarding retirement income? Or When was the last time you followed a big conversation with something in writing that the client could revisit later, instead of trusting they walked out of the meeting with it understood and retained?
Here is why this matters more now than it ever has. If a client forgets that you already gave them this advice, AI will happily give it to them again next year, and this time they will remember the machine and not you.
That is the real danger hiding inside this gap. It is not that AI takes the advice away from you. It is that AI takes the credit for advice you already gave, simply because you were the one who said it first, and nobody wrote it down.
So close that gap this week, not next quarter. Pull up your top twenty clients and ask yourself honestly whether each one could repeat back the last major planning conversation you had with them. If you are not confident they remember, put it in writing today. Make sure the advice stays attached to your name, not to whichever tool happens to repeat it back to them next.
In Closing
The next time a client brings up AI, do not get defensive. Tell them exactly what I told you here. Software keeps getting better at the math. You keep being the one who understands their life.
Robo-advisors proved that once.
AI is proving it again.
FAQ
Will AI replace financial advisors the way robo-advisors were supposed to? Most likely not. Robo-advisors ran that experiment for over a decade and every major firm, including Schwab and JPMorgan, ended up adding human advisors back rather than removing them. AI automates calculations and research, not judgment or trust.
What can AI do better than a human advisor? AI can process data, model scenarios, and explain technical concepts faster than a person can. It's strong on mechanics. It can't read tension in a room, notice a life change nobody reported, or manage a client's fear during a market drop.
Why did big firms like Schwab and JPMorgan step back from robo-advisors? Client demand. Firms found that once a client's financial life got complicated, clients wanted a person they could call, not just an app. Several firms, including Fidelity and Vanguard, now pair automated portfolios with human advisors at higher account tiers.
What is "client amnesia" and why does it matter with AI? It's the gap between advice given and advice remembered. Research shows most clients don't recall conversations advisors say they had. If that advice isn't documented, AI can resurface it later and get the credit instead of you.
This communication is general in nature and provided for educational and informational purposes only. It should not be considered or relied upon as legal, tax or investment advice or an investment recommendation, or as a substitute for legal or tax counsel. Any investment products or services named herein are for illustrative purposes only and should not be considered an offer to buy or sell, or an investment recommendation for, any specific security, strategy or investment product or service. Always consult a qualified professional or your own independent financial professional for personalized advice or investment recommendations tailored to your specific goals, individual situation, and risk tolerance. All examples are hypothetical and are for illustrative purposes only.
Information contained in the materials included is believed to be from reliable sources, but no representations or guarantees are made as to the accuracy or completeness of information.
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