In this world where artificial intelligence and technology-first solutions are available, even the financial sector is seeing new developments in technology. Robo-advisors are just one of these solutions that provide investment recommendations and financial advice using financial data and complex algorithms, and do not require any human intervention.
While this technology is certainly not a new innovation, increasing interest in convenience, speed, and overall ease of use has brought robo-advisors to the forefront of the collective conversation. So is a robo-advisor right for you?
This is just one of many questions you may have when considering robo-advisors. Here, for some clarity, six financial experts Kiplinger Consultant Collective Answer common questions the public may have about robo-advisors and whether they are the right solution for their financial needs.
When should I use a robo-advisor?
“People may wonder when someone should use a robo-advisor and what the pros and cons are. A robo-advisor is a good option for people who lack the confidence to pick stocks independently or prefer a ‘set it and forget it’ approach. However, the account “Understanding the diversity of their offerings (like IRAs and brokerage accounts), management fees, and portfolio options is critical.” — Ramona Ortega, My Money My Future
Is there room for both robo advisors and traditional advisors?
“Some may ask whether there is a place for robo advisors and traditional advisors. Yes! Definitely! I believe the right answer for someone is whether a robo-advisor or a traditional advisor is as personal as your choice of underwear. You will choose whichever one is comfortable and makes you feel best. The only person who has to bear the consequences of the choice you make is you.” — Lyndsey Monahan, Women Inspire Wealth
How will AI impact the effectiveness of robot recommendations?
“We are on the verge of what I called ‘Robo 4.0’ a few years ago. Robot advisors will inevitably be powered by artificial intelligence, which could change the way advisors do business. But advisors should embrace this by automating work that isn’t worth their hourly rate and reclaiming that time to focus on building relationships and serving as advocates for their clients.” — H. Adam Holt, Asset Map
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Are my financial problems too complex for a robo-advisor?
“The clients I deal with have financial challenges ranging from taking time off, to caring for aging parents, to figuring out how much money they can lend to their children to finance their first home, to taking a gradual approach to retirement rather than setting a fixed date. I find peace of mind is having a real person to talk to and options to explore.” can provide.” — Jackie Porter, Jackie Porter’s Team
What factors should I consider when deciding between advisors?
“Clients should consider the advantages of a robo-advisor over a financial advisor. It is crucial to compare and contrast the two when deciding how to manage investments. “Service costs and fees, personalized planning options, and long-term financial savings and returns are key factors clients should consider when deciding whether to use a robo-advisor or a financial advisor.” — Justin Donald, Lifestyle Investor
Are robo-advisors the best solution for investing?
“My answer: Robo-advisors are a good functional tool and offer an easy, generalized process for investing, but truly building and managing your wealth is about much more than investing your money. Advisors use your personal life, It can apply to your family and work challenges.” — Bill Hortz, Innovation Development Institute
The information provided here is not investment, tax or financial advice. You should consult a licensed professional for advice regarding your specific situation.