BBVA Compass, the Alabama subsidiary of a Spanish banking giant, recently launched its robo-advisor platform. FutureAdvisor itself is a major robo-advisor which was acquired in 2015 by giant money manager BlackRock (BLK).

Over the past year or so there has been a lot written in the financial press about different financial advisory distribution channels—brokerage firms, for example—and their efforts to kick start some type of online, automated portfolio management service. Are banks next to join the robo-fray?

BlackRock Plus BBVA Compass

When BlackRock acquired FutureAdvisor last year, the firm said it wanted to offer financial advisors across various channels access to a robo-advisor platform. The BBVA Compass deal is its first major arrangement of this type since the acquisition.

Quoted in a Forbes story about the deal, BBVA Compass Chairman and CEO Manolo Sánchez said, “FutureAdvisor gives us a way to connect more of our clients with convenient, affordable and trusted advice.” He added, “The ultimate goal here is to help our clients take greater control of their finances so they can build bright futures.”

For the bank, this is an opportunity to offer clients who are digitally savvy and technologically inclined the opportunity to invest via a low-cost ETF-driven platform. BBVA offers traditional human advisors as well who are available to serve as a backup for folks who want additional—or traditional—advisory help.

The banks’ robo-advisor option is likely to be a huge advantage for customers. Many traditional brokerage firms slot clients into their own proprietary products, which too often is costly and offers poor to middling performance. JP Morgan Chase was recently fined more than $300 million by the SEC over failing to disclose its preference of its own products for client investment.

FutureAdvisor has an advisory fee of 50 basis points and implements investment recommendations via low-cost ETFs. It also offers a more holistic approach to investing that differs from most other robos.

Other Bank Robo-Models

According to Investment News, many experts think that business-to-business robo-advisor models are the wave of the future vs. more traditional business-to-consumer models made popular by the likes of Betterment and Wealthfront. Reportedly, Bank of America (BAC) is building a robo-advisor platform for its Merrill Lynch subsidiary; Capital One recently introduced a hybrid robo-advisor model that allows clients to build a portfolio from six available ETFs. U.S. Bank has indicated that it will launch a robo-advisor service for clients with at least $100,000 in assets sometime this year.

Banks offering such automated services makes sense—many banks already offer an investment advisory service, mostly via a broker-dealer. Offering the services of a robo-advisor gives bank customers one less reason to go elsewhere; the automated investing advisory solution will help banks compete with financial services firms like Fidelity and Charles Schwab (SCHW), which offer a wider array of services. Schwab recently kicked off its Schwab’s Intelligent Portfolios, which according to reports saw growth of roughly 37% in the third quarter of 2015. (Some of that growth, of course, is due to existing Schwab clients moving on over to the automated platform.)

Giving Banks a Leg Up

Banks have one huge advantage vs. financial services firms: they have a large customer base already in place. A robo-advisor is another avenue in which to provide investment services to this demographic, especially among those with assets at a level that wouldn’t qualify for high-end, high-touch wealth management services. A bank-branded robo would be a good way to cultivate a relationship with young, emerging investors—those in the Millennial and Gen-X space—and court them as their investing and banking needs evolve and increase as they move through life.

Moreover, robo-advisors are a natural extension of the technological prowess that banks aiming to be relevant among today’s increasingly tech-savvy customers must possess.

The Bottom Line

As the lines between providers of financial services continues to blur, it is only logical that banks develop some type of robo-advisor platform as a way to keep existing customers happy and as a way to fish for new prospects. Whether banks build such a service from scratch or choose to partner with an established brand doesn’t really matter; it’s all about offering solid, unbiased advice about portfolio management and investing strategies in a way that people can feel comfortable with.

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Advisors that are less productive and those that offer fewer features than the competition tend to lose out on business. Here’s why keeping up with technology is imperative for financial advisors.

What Tech Will Do

Robo-advisors have raised the bar for financial advisors. In addition to cannibalizing potential clients, the technology is rapidly changing client expectations. A recent survey found that 80% of high net worth individuals under 40 years old would leave a firm that did not integrate new technology like the automated wealth management services provided by robos. Online portals and mobile access to financial accounts and services are quickly moving from a novelty to a necessity for clients, which means advisors ignoring them could be on the chopping block.

Many financial advisors feel that they have a lot of time to implement these solutions, but in reality, technology accelerates at exponential levels. In just three years, robo-advisor pioneer Wealthfront grew from $7.6 million to more than $2 billion in assets under management (AUM). Riskalyze, a risk alignment platform, has seen a very similar growth trajectory as an increasing number of advisors embrace tech designed to automate and improve upon tasks like assessing a client’s risk tolerance.

Technology may be costly to implement and time consuming to learn—and that discourages many financial advisors from deploying much-needed solutions. But headline costs aren’t a complete picture when factoring in things like cost savings and opportunity costs.

Most financial advisors charge around 1% of a client’s invested assets as a fee, which means that someone with $1 million in assets would pay $10,000 per year. With the vast majority of clients willing to leave a firm that’s lagging in technology, advisors risk losing tens of thousands of dollars per year in revenue by avoiding these investments. The technologies themselves often cost much less than opportunity costs and potential lost business without it.

Cost savings is another key area where technology shines. With the average financial advisor earning more than $80,000 per year according to U.S. News & World Report, is his or her time really best spent doing things that could be automated with a $10,000 software application? It’s time that could instead be spent on more impactful tasks that truly set an advisor apart from the competition.

Researching Tech in Advance

Planning in advance is the best way to mitigate the costs and learning curves uncertainties associated with technology. By comparing various technologies well ahead of implementation, advisors can ensure that they’re selecting the right tools for their needs at a reasonable price. Another benefit is being able to take the time to implement these solutions and properly train staff on how to use them rather than haphazardly throwing the systems into a live environment.

Some major areas to consider investing in include:

• Portfolio management and rebalancing
• Customer relationship management (CRM)
• Document management and compliance
• Online portals and mobile access
• Client risk assessments and onboarding

The Bottom Line

The financial advisor industry is becoming much more competitive thanks to the rise in technology. Enabling the ability to streamline operations and improve client services, these technologies have raised the bar for advisors in a number of ways. Advisors who aren’t investing in tech risk falling behind the curve and losing out on business.

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This is not to mention the competition in the field. The United States Department of Labor reports there were 249,000 financial advisors in 2014 and that they are expected to occupy one of the fastest growing sectors of the labor force over the next decade. While the pay can be good, getting those clients and building a solid book of business can be a challenge. If you’re a new financial advisor, consider some of the following methods to secure your first clients.

Cultivate Your Influence

As a new financial advisor, you need to get outside your inner circle. This allows you to build a growing network that can provide ongoing referrals to the services you provide.

You can either do this through social media marketing or through personal relationships though the latter tends to be the most effective.

Don’t limit yourself in growing your network. “My advice to any new financial advisor just starting out is to try to employ ‘leverage’ through the use of centers of influence such as accountants, attorneys, HR directors, business roundtables, as well as through social media. Such relationships with various accounts and attorneys take a lot of time, and, therefore, should be cultivated early in one’s career,” says Donald Reichert, Partner at Capital Design Associates Group, LLC. Reichert’s advice to cultivate that network early in your career is important because you never know who you will meet through networking and making connections earlier spurs career growth sooner.

Serve the Underserved

Retirees, or those near retirement, can be a great source of clientele for many financial advisors. That will only increase as the number of those over 65 is set to double over the next few decades. While that number provides a lot of opportunity for financial advisors, it also provides a challenge – increased competition.

Instead of focusing on the clientele that is over served, consider focusing on demographics that are underserved. “Most advisors work with individuals in or nearing retirement with lush portfolios, but I’m focusing on serving the underserved young professional space. I’ve spent some time focusing on getting in front of advisors to tell our story and how we can help clients,” says Matt Cosgriff, CFP, founder of Lifewise Advisors.

By networking with other advisors, he’s able to not only target those who might be underserved but also breed awareness among the advisor community of how he can help those in need.

Become Involved in the Community

One of the best ways to get your first clients as an advisor is to become involved in your community. Whereas traditional marketing methods require money, community involvement largely requires only time. You may not realize it, but community involvement provides a natural avenue to network with those around you.

Find an organization you support, or an event you enjoy and become involved. This will connect you with like-minded individuals that can potentially turn into clients for your practice. Like the networking mentioned prior, you never know who someone may know, and community involvement is a great way to grow and develop that sphere of influence.

What Provides Little Return

Getting clients as a new financial advisor is a numbers game. You’ve likely heard of, or done some of the following things to get new clients:

• Cold calling
• Providing free meals to encourage attendance at a presentation
• Knocking on doors
• Fish bowls with business cards at trade shows

Those practices, and many others, will provide numbers. However, they can be difficult to build a solid network of clients. “For the first ten years as an advisor, I struggled with the client acquisition process. Cold calling, door knocking, seminars and hoping for referrals were my only solutions. While these methods worked, they were painfully slow, says Devin Carroll, founder of Social Security Intelligence.

This isn’t to say the above-mentioned tactics won’t work. They will work, to a certain extent, but advisors who focus on relationship building and becoming involved in the community can build an organic book of business that spurs the growth your business over the long haul.

The Bottom Line

When people hire a financial advisor they often look to those they see as credible and that can be done best through forming relationships. Through getting out into the community and networking, you can build a firm that will grow with you for years.

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