Every few years a piece of technology comes along that, at least according to its promoters, will eliminate the need for financial advisors. Back in the 1990s it was the rise of discount online brokerage firms like E*Trade and Ameritrade that made it far easier for individuals to buy and sell stocks, bonds, and mutual funds on their own without going through a financial advisor (at the time, a broker-dealer representative) as an intermediary. In the early 2000s it was the increasing power of search engines like Google to find answers to almost any financial question for anyone with an internet connection. Starting in the early 2010s it was the robo advisor movement with its proliferation of technology that could manage a client's asset-allocated portfolio automatically for a fraction of the cost of a human advisor. And now in the 2020s, it's artificial intelligence, which can ingest any number of data points about a user's financial situation and generate personalized recommendations in a few seconds' time.
Of course, none of those previous technological developments managed to truly threaten human advisors. Online brokerage firms might have disrupted the business of some full-service broker-dealers, but they didn't affect anyone whose business model wasn't based primarily on selling financial products. Google might have been a big help to knowledgeable DIYers, but not everyone wants to go through the work of discerning what is actually trustworthy among the dozens of pages of Google results containing often-contradictory information. And robo advisors only ended up threatening advisors who provided no value beyond managing a basic model portfolio (and often actually enhanced the value of planning-focused advisors by reducing the manual work of portfolio management and allowing them to go deeper into planning to attract more complex and higher-paying clients). In other words, the technology that once promised to disrupt human advice has so far failed to do so, either because it really only affected people who were inclined towards DIY solutions (and thus were unlikely to ever hire a financial advisor in the first place) or because it didn't end up meaningfully detracting from any of the reasons that people actually hire human advisors for (and may have even enhanced what human advisors can do by automating their own 'lesser-value' tasks).
All of which raises the question: Is there anything different this time about AI that will legitimately threaten the value proposition of, and consumers' willingness to engage with, human financial advisors? After all, artificial intelligence does hit on many of the areas where prior technology fell short: It can deliver actual planning recommendations (as opposed to just executing a portfolio allocation), and it can personalize its output based on the client's own situation (unlike the generic content of most search engine results).
But just because AI does those things better than previous technology iterations doesn't mean that it's actually capable of replacing human advisors, because there are still more reasons that clients hire human advisors which AI doesn't replace. For many people, it's the ability to delegate the thinking behind their biggest financial decisions to a person who can be held accountable for it. For others, it's developing a long-term trusting relationship with someone they know will truly understand them as a whole person and have their best interests at heart. And in some cases, it's simply that they can better trust a human to have the expertise to solve complex or niche planning challenges than AI technology that still notoriously tends to unwittingly give incorrect information and advice (which at financial planning levels of complexity, would be beyond most consumers' knowledge to even realize the advice might be wrong). But whatever the reason, it's clear that – despite there being ample tools available for individuals to manage their own finances – there remains a sizeable segment of the population who simply prefer to entrust that work to another human, and are willing to pay a premium fee to do so (since that fee is still most likely less costly than either doing no planning at all or making a mistake that compounds over years or decades).
So it's notable to see the announcement from the CEO of the startup RIA Range that they intend to replace most or all of their current two-dozen-plus advisors with in-house AI tools. The announcement itself isn't necessarily news – Range has been announcing its plans to replace human advisors since it emerged as a flashy, Google-backed startup nearly two years ago – but what is noteworthy is the route that Range took to get to this point. After launching and announcing its intent to eliminate human advisors, one of the first things Range did was…start hiring human advisors. In the words of Range's CEO, those advisors then served essentially as training material for Range's AI tools in order to "see what they do, how they think, [and] what makes them amazing financial advisors." And after several years of observing how their human advisors work and use technology (e.g., the Altruist platform where they custody assets), Range has purportedly "flipped a switch" so that AI, rather than human advisors, is operating most of the technology itself. Which now supposedly opens the door for Range to wind down its advisor workforce since, in its view, with AI in charge of managing the investments and conducting analyses to deliver planning advice, there isn't much of a role for left for the humans who were pressing the buttons.
That may all make sense when coming from the viewpoint that most of an advisor's job is to manage investments and operate planning software, such that they can be easily replaced by an AI tool that can do the same thing just as adeptly. In that view, the only difference between a full-service advisory firm and a direct-to-consumer technology company is whether a human or an internal AI agent is in the metaphorical driver's seat delivering the advice message. But the reality is that there's a much bigger shift when going from human advice to consumer-facing technology, that becomes apparent when looking at the economic models of each.
As a service business, human advice can only achieve so much scale since each advisor has a limit to the amount of time they have to meet with clients and thus the number of individual clients they can serve effectively, and so human advisors need to charge a premium fee in order to operate profitably (usually on the order of $3,000 dollars a year per client at minimum, according to the most recent Kitces Research on Advisor Productivity). And clients are willing to pay these fees because of the value the advisor provides in that relationship, whether that's by building trust, maintaining accountability, or providing expert advice. Whereas a technology business is all about scale and growing as large a user base as possible, often by heavily discounting fees to attract consumers who are more focused on minimizing cost than on paying a premium fee for a human relationship in order to get the most value. And so while Range is currently charging human advice-level fees (from $2,950 to $9,950 per year) rather than traditional direct-to-consumer software fees (e.g., $9.99/month!?), does it expect to continue to be able to do so once its clients no longer have human advisors to work with? Or will it find that its clients have expectations for the type of service they'll get for the (human-level) fees they're paying that AI tools alone aren't set up to deliver?
What's more likely is that Range will need to radically adjust its fees and business model if it truly aims to replace its human advisors with AI and successfully distribute to consumers. Which will also mean needing to deal with the completely different reality of client acquisition costs as a technology company versus a service business – e.g., it can make sense to spend $3,000 or more to acquire each client if the client pays $5,000+ in fees each year, but not so much when the client is only paying $500. Which is the same lesson that robo advisors learned over a decade ago, who assumed that consumers would abandon their financial advisors in droves in favor of a lower-cost alternative but ultimately ended up fighting for the business of price-sensitive DIYers while blowing up their business model in the process as high client acquisition costs in the financial services industry trumped the reduced unit economics of their low-price-driven DIY model. And even if Range can succeed in initial client acquisition, there will still be the matter of its ongoing retention rates, which are often 95% to 98% with human advisors… whereas if Range falls to 'just' 80% retention rates with a more DIY-price-sensitive clientele it would cut their lifetime client value to 1/4th of what it otherwise would have been (which, in turn, will once again make their client acquisition costs problematic).
And so the big question is: If Range has already built a successful tech-forward (but still human) advice business, why would it insist on radically pivoting into a technology-only model that has proven so treacherous in the past? The answer might be that the company doesn't have much of a choice in the matter, given its tech-focused investment backers (who invested into the thesis of a scalable technology business with tech margins, not a human planning business with human profit margins). But either way Range seems likely to find that going from human to AI advisors while still attracting and especially retaining clients is not as simple as flipping a switch, and that consumers who want to delegate their advice to a human have very different expectations for the level of advice they receive (and the fees they're willing to pay on an ongoing basis) than those who would rather manage their own finances with the help of an AI "advisor".
This article first appeared on the Nerd’s Eye View at Kitces.com at https://kitc.es/advisortech-april2026, and has been reprinted here with permission.
Ben Henry-Moreland is a Senior Financial Planning Nerd at Kitces.com, where he specializes in writing and speaking on financial planning topics including tax, practice management, and technology. He also co-authors the monthly Kitces #AdvisorTech column. Drawing from his experience as a financial planner and a solo advisory firm owner, Ben is passionate about fulfilling the site’s mission of making financial advicers better and more successful.
Michael Kitces is Head of Planning Strategy at Focus Partners Wealth, which provides an evidence-based approach to private wealth management for near- and current retirees, and Focus Partners Advisor Solutions, a turnkey wealth management services provider supporting thousands of independent financial advisors through the scaling phase of growth.
In addition, he is a co-founder of the XY Planning Network, AdvicePay, fpPathfinder, and New Planner Recruiting, the former Practitioner Editor of the Journal of Financial Planning, the host of the Financial Advisor Success podcast, and the publisher of the popular financial planning industry blog Nerd’s Eye View through his website Kitces.com, dedicated to advancing knowledge in financial planning. In 2010, Michael was recognized with one of the FPA’s “Heart of Financial Planning” awards for his dedication and work in advancing the profession.
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