Investment management has always been a traditionally relationship-oriented business. It requires a certain level of trust, faith and sense of community for people to hand over their life earnings, their college funds, their retirement money to a third party.

Technology is disrupting that connection. People are forming social bonds and networks online. Social skills are being measured by Twitter and Instagram engagement or Facebook likes. The millennial generation has built an unprecedented sense of trust with technology, particularly with their smart phones, and demand transparency in all of their transactions.

However, the trend toward technology-based relationships over face-to-face interaction shouldn't discourage the investment management industry. Technology is a power ally to help investment firms empower their distribution partners.

Shifting dynamics

The structural changes in workplace and workforce are challenging some of the basic constructs around retirement products and the wider investment industry. For one, robo-advisors, or algorithm-based advisory services, have become the talk of the town. A number of companies, such as Robinhood and Betterment, which has more than $3 billion in assets under advisement, have raised an incredible amount of money building online tools that deliver automated or algorithm-based portfolio management advice, offer automatic portfolio rebalancing or tax-loss harvesting and provide other services that help clients determine how to invest their money.

Further, employment trends such as the gig economy are changing the type of products and services new customers will need. A gig economy is an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements. According to a study by Untuit, 40% of American workers are expected to be independent contractors by 2020. This is fundamentally shifting the requirements for retirement investment products.

Are the advisors bound to become extinct?

With this an increasing reliance on technology to manage these changes, does it imply that the advisors are bound to become extinct? Robo-advisors collectively manage an estimated $20 billion, which is predicted to reach $450 billion worldwide by 2020, according to research firm MyPrivateBanking. That's just a tiny chunk of the $16 trillion individual investment business, but it's big enough for investing heavyweights, including the likes of Charles Schwab, Vanguard Group and Fidelity, to take notice.

Charles Schwab recently questioned the lack of transparency between clients and their money managers in a recent commercial. Vanguard Group, which eschews the robo-advisor term, views its new "Personal Advisor Services" platform as a hybrid approach between the two, offering sophisticated online tools but also giving clients access to human advisors.

Still, while technology is forcing investment firms to adapt, past approaches aren't going away either. Even firms such as Betterment lean on human interaction to offer complicated financial planning to their clients. Indeed, despite the technology dependence of the millennials, a recent study found that the 'affluent millennials' believe financial advice from an advisor is a must have.

If investors are looking for the best of both worlds, the question is, are the investment firms and their distribution partners working together to be the advisor of choice and offering an omni-channel approach?

Evidence suggests they are at least starting to. A number of forward thinking firms, such as Putnam Investments, have recently launched initiatives to empower and educate their advisors. Vanguard CEO Bill McNabb recently talked at an Inside ETF conference on how advisors must tell their story.

If leveraged correctly, robo-advisors can be smart colleagues that empower the advisors to be millennial ready. But the relationship will always remain as the differentiator. In today's uneasy, choppy global markets, advisors have an unprecedented opportunity to leverage technology to transform their role from advisors to that of a life coach.