Robo-advisors – automated services using algorithms to generate portfolio recommendations and financial planning advice – have drawn lots of attention from investors, industry analysts and the media. Although robo-advisors have only attracted a tiny share of total assets under management, companies throughout the financial services industry are forming partnerships with robo-advisors, purchasing startups and, in some cases, developing their own automated solutions.

Much of the original buzz about robo-advisors was based on price. With fees ranging from zero to 30 basis points – far below industry norms for managing large accounts – robo-advisors were thought to be well positioned to attract younger investors and/or those with smaller portfolios.

While that is true to some extent, the appeal of the robo-advisor concept is actually about much more than just pricing.  As noted in Barron’s, “The change is being driven by technology, but it’s cultural in its roots.” Millennial-age investors like the speed and simplicity of software-based solutions. Barron’s quotes Adam Nash, the CEO of Wealthfront (an independent robo-advisor with more than $2 billion in assets under management) as saying that “In the next 10 years, everyone will be using some form of automated investment service. This is like e-commerce in the 90s.”

Accenture’s own experience with wealth management firms, and our own research into robo-advisors, leads us to the same conclusions. The robo-advisor concept has matured quickly. Firms should no longer see automated advisory services as unwelcome competitors, or as cheap alternatives for accounts that are too small to be of interest. Rather, they should evaluate the immense potential in combining automated advice with “the human touch,” especially as automated advice expands to encompass advances in cognitive computing and other breakthrough technologies.