Note from the Publisher: Many of FintekNews’ readers are wealth managers and RIAs, and the topic of robo-advisors remains one of great concern and debate. We personally are neutral on the topic, but we sincerely believe that it doesn’t matter what 40- or 50- or 60-year olds think on this subject. What matters is what millennials think (although I did see a statistic somewhere that the average current robo-advisor client is in their 50s!). Millennials are very oriented toward using apps for all processes of finance and payments, and they are the main generation that will be using robo-advisors in the future. OF COURSE everyone will want human advice from time to time. Anyway, great article rehashing the debate once again.
“Robo advisers offer some advantages, but the most comprehensive financial guidance still requires human touch.
A new online investment service promises to provide all consumers with low-cost expert investment portfolio management. Known as robo advisers, digital advisers and online advisers, these groups offer fully automated, low-cost, low-touch, algorithm-driven professional portfolio management.
For years, the financial services industry made all of the rules when it came to investing. If consumers wanted to assess their financial situations, determine appropriate investments, or buy and sell securities, they had to work with a financial professional. In the late 1990s, advancing technology opened the financial floodgates, and everything changed. For the first time, without the involvement of a financial adviser, consumers could easily access company information, the industry’s best investment research and trade securities economically. For some consumers, it was the answer they were looking for. Suddenly they had all of the necessary information at their fingertips; they could save money and choose not to share their intimate financial information with anyone.
When it comes to investing, individuals who do it themselves are a unique breed. Some are very knowledgeable, some are confident enough to make their own investment decisions, some are thrifty and some are too arrogant to ask for help. But the do-it-yourself approach doesn’t work for everyone and the majority of consumers feel more secure when working with a knowledgeable industry professional. “