While the market for firms offering online financial advice is limited even by the most generous estimates, the biggest opportunity may be partnering with traditional advisors, according to a report by Aite Group. Based on research with people 20-49 years old, the potential revenue opportunity is estimated at $2-$4 billion. Compare that to the nearly $18 billion that Bank of America realized last year.
But many Millennials who are getting rich do not want to talk or listen, relying more on texting and tweeting. This might make the online platforms more attractive if they can find a middle ground between access to people on the phone or in person and very impersonal online calculators. Many online firms have rich IP resources and are adept at blogging and social media — both of which are foreign to most advisory firms. Just as the 1990s heralded discount brokerages, a dramatic sea change could be coming, as many of the online firms looking to white-label their services may offer interesting partnerships for advisors.
