The robo-advisor: not since John Bogle came up with the idea for Vanguard in 1975 has a new development in the investment industry caused so much controversy and turmoil.

I can appreciate Wealthfront CEO’s position on his new robo competition from Charles Schwab. There are already dozens of media stories that detail the debate. I don’t want to argue about the minutia involved with each robo product offering. After all, every financial services company has a right to offer new products and evolve how they deliver investment services. However, here’s what the entire Robo Industry is missing: advice.

What neither Schwab’s nor Wealthfront’s new robo programs offer is real life advice in the form of a dedicated advisor. Ultimately, I believe both of these companies miss the true value that leveraging technology offers to the investment industry… providing better service to people who are relying on professionals to manage their life savings and offering individualized advice when faced with difficult financial decisions.

Pure robo-firms have lowered the cost to invest, the same way ETFs did back in the early 2000’s. That’s a good thing for investors. They haven’t, however, provided a better solution to deliver personalized advice to an extremely under-served area of the investor marketplace… the mass affluent, or those who have less than $1 million in investable assets.

The real future of investment advice for this group lies somewhere between what the Wealthfront and Vanguards of the world are offering, and what the full service brokerage houses are doing at places like Merrill Lynch and Morgan Stanley.

Study after study have shown very clearly and explicitly that for most investors the extraordinary push and pull of emotions tied to investment decisions is the real cost (or drag) on earning strong annual compounded returns over time. This is the reason that an option must exist in the middle of the robo and the traditional. That’s why my partners and I developed Wela.

Wela leverages technology to deliver a low-cost investment solution while also providing access to personalized investment advice. We’re a company with real people, using technology to make our jobs easier, and more importantly, to make our clients’ experience better, simpler, and comprehensive.

On the yourwela.com platform, there is no fee charged to our users who simply want to aggregate and monitor their investment accounts, cash accounts, real estate values, mortgage balances, etc. We do, however, charge a fee when one of our users raises their hand and says, “Wela, I need help with this account. Can you help me manage this piece of my financial equation?” Our average Wela client pays between 0.75% – 1%, and we use no proprietary ETFs or mutual funds. We use only what our Investment Committee and technology deem to be the best, low-cost investment solution depending on your specific situation.

Clearly I have a vested interest in spreading the word about Wela, what we deem as a Digital Advisor, not a robo investment solution. There are $20 trillion of investable assets in the US right now, and with such a large pie, there is plenty of room for all types of investment strategies. A portion of that pie will always use the lowest cost provider. In the investment industry, this means the majority of clients will end up talking to a call center when they have questions, and have their portfolios managed by R2D2. On the other end of the spectrum are the investors who will always need a full service financial advisor to consistently consult on all financial matters.

It is my belief that, over time, the biggest slice of the investor pie will likely employ a thoughtful combination of R2D2 and Harrison Ford, embracing technology while also maintaining a human element as they consume financial advice. We believe a company that is able to leverage technology to more efficiently serve a broader group of people with more personalized service is ultimately going to stand the test of time.

Read the original article here.