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BMO Nesbitt Burns launched the pilot phase of its robo-adviser, BMO SmartFolio, last week.Fred Lum/The Globe and Mail

After much skepticism, Canadian wealth management firms are now quickly moving to incorporate online robo-adviser offerings to their existing advice channels for investors.

"The market demand [for robo-advice] is no longer debatable," says Kendra Thompson, Accenture's North America lead for wealth and asset management services. "In the past, most firms were disregarding these platforms as they didn't have a lot of assets under management, but now it is the exact opposite and those same firms want to discuss what this means for the future of advice within their businesses."

"It's remarkable how quickly the tide has turned and the only explanation for that change is actual dollars moving and actual demand from clients."

Ms. Thompson predicts that over the next 18 to 24 months, investors will see a majority of wealth management firms in Canada – including the big banks – launching robo-advice channels.

"Canadian firms are moving much more quickly on this front than we have traditionally seen in the United States," Ms. Thompson says. "We believe that robo-advice will have a significant effect on the future of the wealth management industry as a whole."

Although total assets under management for the online advice space remain a mystery for the Canadian marketplace, U.S. assets are projected to reach between $55-billion (U.S.) and $60-billion by the end of 2015.

The popularity of robo-adviser offerings are mainly due to lower fees and quick online tools. But financial advisers will remain central to wealth management, with 77 per cent of wealth management clients indicating they trust their financial adviser and want to work with them to manage their wealth, according to a recent Accenture research paper, "The Rise of Robo-advice."

The report found robo-advice will complement, rather than displace, financial advisers and bring additional capabilities to the investment industry such as: access to the growing millennial market, advances in technology and the acceleration of the trend toward lower fees.

Several Canadian wealth managers have already announced this year that they are in the middle of building online portfolio platforms that will be used in collaboration with their financial advisers. Richardson GMP, Assante Wealth Management and HollisWealth – Scotiabank's independent advisory network – all have plans to launch an online wealth management platform that will complement – not compete with – their advisory networks.

In 2016, HollisWealth intends to offer an automated financial planning tool in which existing clients will be able to interact with their advisers and review their current financial plan. The platform will not be available for do-it-yourself investors but potential customers will be able to input details for retirement, investment, insurance and estate planning – resulting in a draft plan that can then be referred to a financial adviser.

"This is a blended approach between technology and the personal and holistic relationship with an adviser, where technology becomes an extension of the adviser and provides a targeted resource for certain client segments (e.g. millennials) and their preferences," says Tuula Jalasjaa, managing director and head of HollisWealth.

BMO Nesbitt Burns launched the pilot phase of its robo-adviser, BMO SmartFolio, last week. The tool is not exclusive to the adviser network but over the past few months, the bank provided their investment advisers advance notice of the new service and information on how they can integrate it into their businesses.

"The ability of our advisers to direct clients to the most appropriate advisory service strengthens relationships with individuals and their families as it reinforces that we have their interests in mind," says Charyl Galpin, head of BMO Nesbitt Burns. "As a client's needs change, where more advice or financial planning support is needed, our advisers will work with them to identify the most appropriate solution."

Whether the remaining banks will build internal platforms – like BMO – or look to acquire existing businesses in the robo-advice space is yet to be determined, Accenture's Ms. Thompson says.

"The industry is going to see a mixture of partnerships, acquisitions and proprietary product all happening at the same time," she says. "If we compare to what is happening in the U.S., the speed at which the incumbents are able to review and duplicate what the disruptors are doing will be pretty quick."

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