Robo-advice businesses must evolve or face extinction, according to Simon Bussy, principal consultant at Altus.
Mr Bussy, who works with robo-advice firms, said many robo-advisers were spending too much money on acquiring new customers to have a viable business model, and the advertising strategies they have used have been ineffective.
He said: "I think the business models of these firms is going to have to change, they are going to have to move away from having a business to consumer model and into being more business to business, and into being technology providers, with their tech enabling the incumbent players, such as banks, to improve their proposition."
Mr Bussy said he knew of one firm that spent £40,000 on a London Underground advertising campaign, and they got five customers from it.
He said: "Robo firms are spending between £200-£300 per customer, to acquire a customer, and the average charge is around 0.7 per cent. The average pot of assets is £10,000, which means they are earning £70 a year from an average customer, so it takes three or four years of revenue just to stand still, and that is before you consider the fixed costs of operating that firms have."
He added: "The problem is that in the UK, on matters of money, people trust banks, they may not like them but they trust them. The incumbent advice firms have the advantage of established brand, customer base and deep pockets.
"The robo advice firms have technology, and I think that is where partnerships will be formed, but not all of the incumbent firms will survive."
He drew parallels with Ocado, an online grocery retailer that evolved by providing technology to other, more established firms in the same sector such as Waitrose, and to online banks in US which, a decade ago, were established to compete with existing firms but were ultimately acquired by incumbent businesses or ceased trading.
He said many robo-advisers had been able to attract funding from investors as markets were rising and interest rates were low but he warned when both of those trends reverse, investors will become more risk averse.
Alan Miller, founder of traditional wealth management firm SCM Private has described robo-advisers as living in a "fantasy world" and called on the Financial Conduct Authority to investigate the business models of the firms.
He said: "UK robo advisers are wired to lose money, and most will go bust before acquiring the sizeable assets under management to ensure their sustainability.
"Surely the FCA and the Treasury should be looking at UK robo-advisers to test whether their financial models make any sense.
"If the answer is no, is it not irresponsible to allow mainly novice investors to have their money managed for the medium to long term, by companies who may well not exist in years to come?"