The Secret Threat to the Advisor Referral

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The Secret Threat to the Advisor Referral

The Secret Threat to the Advisor Referral

Since the introduction of the “Robo-advisor” years ago, there has been a consistent push of automation and do-it-yourself mentality.  A recent article by CNBC has revealed more “day traders” during the Pandemic than ever before*.  Companies such as Schwab and Fidelity are doing more and more direct to consumer advertising even though they are the biggest clearing agencies for Registered Investment Advisors.

As financial advisors see the threats all around them, most sophisticated individuals (and those that just prefer professional guidance) still use the services of licensed financial advisors.  Most agree that this will really never go away.  There will be only two types of “do-it-yourselfers,” the ones who don’t possess much wealth and those that enjoy doing it on their own.

When it comes to estate planning, a software solution, Trust & Wills just raised an additional $15 Million dollars in Silicon Valley to “bring estate planning to everyone.”  While this isn’t the first solution that has presented itself to the do-it-yourselfers (, Rocket Lawyer, Legal Zoom), the pressure to compete creates its own challenges.  This necessarily didn’t take away from the financial advisor referral, but recently new threats are beginning to appear.

Since referrals are some of the best customers, Financial Advisors can be a significant source of business for estate planning attorneys. The consistent fight for Financial Advisors has been quarterbacking the process to add value and making money while avoiding the practice of law.  Therefore, if it is impossible to add value, generate no income, then estate planning for clients is diminished to legal documents.  Guiding a client to legal documents for an advisor opens up a minimum estate planning offering and opens up the opportunity for estate planning attorney referrals.

A recently new advisor technology, Just Vanilla, is advertising to financial advisors a simple and easy way to automate the estate planning process without the expense and hassle.  The software provides intangibles that advisors are used to but also one key component, automated legal documents.  The target is clear, advisors to use technology to replace referring to local estate planning attorneys**. Interpret that as you would like, but advisors are buying in.

In the age of technology, there are more examples of technologies trying to corner the advisor market.  Helios Integrated (estate) Planning offers advisors the opportunity to provide basic documents to their clients for a small fee.  They offer the guidance of attorneys to buffer the practice of law for the advisors.  Both Just Vanilla and Helios see a great opportunity for the advisor market, and if they succeed, this will result in less advisor referrals for estate planning attorneys.

Like most professionals, we brush threats off as noise.  Others adapt and begin to move in the direction of technology to compete with automated processes. Technology presents an opportunity to compete for the advisor referral.  As a consensus, we would all agree that in the moment of death, most would prefer the human assistance.  For those reasons, it is imperative for estate planning attorney to not squander the opportunity to use technology to compete with the challenges that keep coming their way.


*CNBC “Your Money Mindset” - Monday, September 21st, 2020
**”The attorney will complete a detailed review of the documents” – Just Vanilla


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Just in case you didn’t have the opportunity to peruse through the exhibit