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Advisors, Kodak and the Road to Irrelevancy

Advisors, Kodak and the Road to Irrelevancy

The financial advice industry is having a Kodak moment. And I mean that in the worst way.

Rather than capturing meaningful moments on film, most advisors are following the once-mighty Eastman Kodak Company down the road to irrelevancy.

As with Kodak in its heyday, today’s established financial advisors have built incredibly successful firms—but are ignoring technological innovations that threaten their business model. Unlike Kodak they still have time to adapt. But will they?

In the early 1980s, Kodak seemed unassailable. The company had not only created cameras, it had created a vast market for them and for its film, virtually from scratch. With their brilliant “Kodak Moment” tagline, the company’s ads had enshrined photography at the center of family life.

By 2012, the Kodak was bankrupt. Blinded by its own success, the company had scoffed at digital rivals. By the time it invested in digital initiatives of its own, it was too late.

The parallels between Kodak and today’s financial advisor industry are striking. Human advisors control the brokerage and advice market, managing billions upon billions of Americans’ money and raking in rich fees.


As with Kodak, most advisors are in denial about technology, specifically so-called Robo Advisors. These software-based platforms provide consumers with many of advisors’ core functions—like asset allocation, security selection and tax management—at a fraction of their cost. And they do it via slick, user-friendly digital interfaces.

Most two-legged advisors are doing their best Kodak impression—ignoring or scorning the upstart competitors. Looking ahead, it’s depressingly easy to see a progression from dismissal to grudging acceptance to adjustments that are too little, too late.

That’s not to say there aren’t forward-looking advisors. Many have begun to adopt robo-technology into their practices to handle the “commodity” elements of their business—such as building and maintaining investment portfolios based on client information. This is freeing up human advisors’ time to provide services that they are uniquely able to deliver. A skilled advisor has no digital competitor when it comes to things like estate planning, intergenerational wealth education, or simply giving clients a dose of straight talk when they need it.

By incorporating new technologies into their practices, these advisors are able to better service their clients. What’s more, I expect that their pricing will begin to more closely reflect the value they’re actually adding. Many clients will pay less, thanks to the efficiencies of technology, while others will pay more because their situations require more of their advisors’ time and talent. In other words, advisors’ pricing will become more rational and fair.

Photography, in case you haven’t noticed, hasn’t gone away. It has survived Kodak very nicely, thank you. Likewise, financial advice won’t go away—not as long as people need help making wise decisions about their money. The only question is which human financial advisors will still be around to deliver it.

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