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.

“It’s real money moving,” Thompson said in an interview. “You’re seeing experimentation from people with much larger portfolios, where they’re taking a portion of their money and putting them in these offerings to try them out.”

Traditional brokerages including Morgan Stanley, Bank of America Corp. and Wells Fargo & Co. are under pressure to justify the fees they charge as the low-cost services gain acceptance. The banks, which collectively employ about 46,000 human advisers, will respond by developing tools based on artificial intelligence for their employees, as well as self-service channels for customers, Thompson said.

“Now that they’re starting to see the money move, it’s not taking very long for them to connect the dots and say, ‘Whatever I offer for a fee better be better than what they’re offering for almost nothing,”’ Thompson said. Technology will “make advisers look smarter, better, stronger and more on top of the ball.”

David Fuller's view

Robo-Advisers are an inevitable development and they are not just a fad that will pass with time.  Consider this – a smart computer programme can monitor every listed share on the planet, if that is the field which you or any other investor would like to survey.

Robo-Advisers will operate most effectively and with less programmer subjectivity, by ranking shares in terms of relative strength and weakness.  In other words, their users/subscribers/operators will be able to monitor all of the best momentum plays.  Crucially, they will also be able to identify any waning momentum play which is starting to underperform. People will want a human override, just as we have with driverless cars today, but the human role in terms of investment managers is rapidly becoming redundant.