Can robo-advisors win control of investor assets?

In a world where there's an app for any task, dozens of new tech start-ups are promising investors a faster, cheaper and more convenient way to manage their portfolios: the robo-advisor.

While individually, and collectively, these companies are small—accounting for a few billion dollars in assets and perhaps no more than $10 million in revenue for the entire space—they are backed by seasoned venture capitalists, led by passionate millennial CEOs, and are aggressively trying to disrupt the industry.

But not all robo-advisors are created equal.

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Some are purely algorithm-driven guides that overlay existing accounts and tell investors what to buy, sell or hold. Others offer managed accounts or portfolios with little or no human interaction. And some do provide access to a human advisor—but only via phone calls, emails and video chats.

All cater to a digital native mind-set that smart and powerful technology is superior to a human service provider. Think or and the impact they have had on the travel industry—and travel agents, in particular.

Ostensibly, robo-advisors may address the underserved population of investors who do not have large enough accounts to meet traditional wealth management minimums. Or they can move up-market to serve sophisticated investors who have lost confidence in the traditional broker or advisory firms.

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The young, tech-savvy demographic might find a robo-advisor a particularly useful tool for managing investment needs. An algorithm can theoretically make better and more precise decisions about exact asset allocations, the use of investment products and when to execute various changes to the portfolio.

This process should make those decisions in a more cost-effective manner than a human advisor can deliver. This theoretical proposition, if substantiated, might provide small account holders with a superior way to manage their investments when compared with a costly, and likely unsophisticated, financial advisor.

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Learning to walk

Today, robo-advisor technologies are in their infancy and are not yet robust.

The robo-advisor cannot navigate complex financial situations, such as saving for children's college educations or managing an inheritance over multiple generations. Nor have any of these robo-services maintained investor confidence through a market correction or bear market conditions.

They do not have the sophistication to provide guidance, which requires a human advisor to understand the emotions driving a client's questions, concerns and needs.

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In addition to the challenges of servicing clients, there is also the challenge of whether these new technologies are sustainable standalone businesses. While robo-advisors can act as a new modality of investment services, are they strong enough to grow into independent businesses, or will they be absorbed by traditional financial advice firms to augment human advisors?

We will just have to wait and see.

"Technology gives advisors the freedom to forge real, lasting, meaningful relationships with their clients."

So what is the takeaway for individual investors?

On the surface, robo-advisors look like a disruptive force in the financial services industry. But in time we may all think of them merely as an evolution of the traditional advice model.

Much like surgeons have adopted robotics to make operations more precise, less painful and overall easier on the patient, financial advisors can utilize technology to improve their client relationships.

Read MoreTrust a robot with your money?

By automating tasks that are better suited to computers, financial advisors can devote a larger portion of their time to demonstrating their unique value: collaborating with clients, talking through complex scenarios and giving guidance on any number of situations.

Technology gives advisors the freedom to forge real, lasting, meaningful relationships with their clients, which, much like a doctor's bedside manner, is a skill that can't be replicated by a digital solution.

—Elliott Weissbluth is CEO of financial services firm HighTower.