Investors' growing adoption of passive investments like ETFs has been well documented. The Investment Company Institute says that at the end of 2014, total assets in ETFs held in the U.S. were nearly $2 trillion, accounting for 13 percent of total net assets managed by long-term mutual funds.

Last year, Broadridge Financial Solutions, a provider of communications and technology solutions for the financial services industry, said for the year ending in September 2015, ETF assets had increases $144 billion, or more than 7 percent from the previous year.

Retail investors paced the growth, said Broadridge. About 63 percent of all ETF assets are held in the retail channel. As more individual investors moved into ETFs, which of course are marketed in part for their low expense ratios, institutional investors actually limited their exposure to ETFs by $6 billion for the year ending last September 2015.

The slowing of institutional adoption comes as a growing consensus of investment experts is predicting that equity markets will be hard pressed to produce historical levels of return over the next decade.

Recent performance of passive equity ETFs may have shocked those investors that perceive the investments as a buffer to risk, says Natixis.

On February 11, the Standard and Poor's 500 bottomed-out for the year, marking a 10.5 percent loss from opening trading at the beginning of January.

The S&P rebounded to post a marginal return by the end of the quarter. Nonetheless, tracking the index resulted in a "hair-raising ride" for ETF investors.

"It is critical to understand the risk in your portfolio, so it's troubling to see investors mistakenly assign benefits to index funds that they don't actually have," said John Hailer, CEO of Natixis for the Americas and Asia.

"Index funds have a place in portfolios, but their low cost seems to be providing a 'halo effect' that could blind-side investors during volatile markets," added Hailer in a release.

How robo-advisors are deploying ETFs

Robo advisors are of course banking on ETFs to deliver low-cost, index tracking platforms that accelerate investors' long-term returns, in both the retail and 401(k) market.

Jessica Rabe, an analyst who covers robo-advisors for Convergex, a brokerage and service provider, recently set out to see how two leading upstarts were allocating equity ETFs amid recent volatility and a potentially low-return climate.

Her conclusion: Some of the recommended portfolio allocations offered by Betterment and Wealthfront are more "equity-centric than investors may realize," Rabe recently wrote.

Millennials in their early 20s making $50,000 a year were predictably recommended portfolios heavily weighted in equities: Betterment and Wealthfront recommended a 90/10 and 82/18 equity-to-bond split, respectively.

By comparison, a 55-year old earning $250,000 is recommended a 73/27 and 65/35 mix, respectively.

Rabe then compares outcomes to a traditional 60/40 equity-to-bond ETF split. Rabe uses the beginning of 2014 as the starting point for the comparison, reasoning that that "is when robo advising really started to take off."

She concludes that the 60/40 model outperformed the models offered by the two robos, which Rabe says may point to investors not realizing how equity-centric the robo offerings are.

The total return for a 22-year old's portfolio was 8.9 percent for Betterment and 9.3 percent for Wealthfront, compared to 13.7 percent with the traditional 60/40 split.

The 55-year old also saw lower returns than with a 60/40 split: 11.4 percent for Betterment, and 12 percent for Wealthfront.

Rabe notes that both Betterment and Wealthfront emphasize a long-term approach to investing, "which is why they may include such a high equity tilt to their suggested portfolios."

Neither firm says they target millennials exclusively, but clearly the age-set is attracted to robo investing.

Millennials need growth, acknowledges Rabe. But they also need to stay invested long enough to experience it.

"Too much equity exposure during a downturn could spook millennials out of the market early on in life," warns Rabe.

Human touch missing from pure robos?

Champions of the traditional role of advisors in the future investment landscape will of course welcome Rabe's math and attending hypothesis.

In Natixis' new survey, 68 percent of respondents said they avail themselves of some type of advice—48 percent work exclusively with an advisor, 6 percent use only a robo platform, and another 14 percent use a combination of the two.

And 71 percent of respondents said professional advice is worth the fee.

"Investors know they need help from a professional, but they want more than an investment recommendation," said Natixis' Hailer.

"Investors want a relationship that will make them smarter and better informed," he added. "Advisors need to make sure they are making every effort to listen to investors and personalize their services to best meet investors' needs and goals."