By Hugh Son and Margaret Collins

Banks and traditional brokerages like Morgan Stanley, Bank of America Corp. and Wells Fargo & Co. are watching as small innovators and wealthy clients are moving towards the use of robo-advisors. Automated portfolios are moving vast amounts of money, making it difficult for banks to justify exorbitant fees for low cost services. Thus, it is essential that these financial companies develop their own versions of this technology.

The article begins as follows:

Banks are watching wealthy clients flirt with robo-advisers, and that’s one reason the lenders are racing to release their own versions of the automated investing technology this year, according to a consultant.

Millennials and small investors aren’t the only ones using robo-advisers, a group that includes pioneers Wealthfront Inc. and Betterment LLC and services provided by mutual-fund giants, said Kendra Thompson, an Accenture Plc managing director. At Charles Schwab Corp., about 15 percent of those in automated portfolios have at least $1 million at the company.

Read the full article here: The Rich are Already Using Robo-Advisors, and that Scares Banks – BloombergBusiness