Last week, WiseBanyan, which is an online-based free advisor that manages portfolios of exchange traded funds, went live. It has no minimum account size and no sign up fees. Meanwhile, Wealthfront of Palo Alto, California, is trying to win client by charging nothing for accounts with less than $10,000 and only 0.25% for accounts with $10,000 or more, according to a recent article from The Wall Street Journal. Wealthfront has $730 million in assets under management, up from $100 million in early 2013.

Another online advisor, Betterment of New York, charges as little as 0.15% and has almost $500 million in assets. In some cases, firms use automation to keep costs down. In the case of Wealthfront, the firm is seeking to generate revenues by pitching additional services.

Some investment advisors may also view the free- and low-cost providers as killer apps. After all, it’s hard to argue with no or low fees. Yet, intermediaries can fight back against the new breed of low-cost advisors. Perhaps the most powerful strategy for advisors, not surprisingly, is to deliver value added services along with investment management.

With that in mind, it isn’t surprising that the Certificate of Financial Planning credential is growing quickly in popularity. Under the certification’s code of ethics, advisors who claim to deliver financial planning must provide (or work with other advisors to provide) advice on retirement planning, investments, insurance, estate planning and other financial areas.

In other words, the advisors must embrace a comprehensive view of financial planning rather than just provide investment advice. Such comprehensive services, while creating extensive knowledge in a variety of disciplines, are a powerful way for advisors to differentiate themselves from low-cost or no-fee providers.

Advisors should be ready to provide real life examples of how their advisory services add value. For example, clients without sufficient disability insurance will be unlikely to replace income lost upon having an injury or illness that prevents them working. savings.

As another example, a widow of an income earner who lacked adequate life insurance will have to survive without having income replacement that the insurance product could have provided. In a similar manner, proper estate planning can insure that individuals’ final wishes are respected while saving considerable amounts of estate and inheritance taxes.

Being able to provide examples of such mistakes that can be avoided with financial planning can go a long way in making the stand-alone portfolio management services offered by free- or low-fee online providers seem inadequate. Investing through an advisor, needless to say, requires a high level of trust. For most clients, that trust is obtained through face-to-face meetings, during which advisors can get to know their clients.

The process involves more than just understanding clients’ financial needs. Indeed, it can entail understanding the best way to contact a client and learning about a client’s passions and goals outside of investing. It’s a time to build a relationship that can be lacking with online only services.

Traditional advisors also have the advantage of earning trust from prospects and clients by being part of a community. Many advisors say volunteering for civic purposes is a powerful way to prospect and promote their images among members of their communities. The idea is that advisors have a hometown advantage when competing against online web services.