Robots versus Humans: Financial Advisers for the Digital AgeSubmitted by Connecticut Wealth Management, LLC on April 24th, 2017
The digital world has transformed professional industries in unique ways that prior to internet access would have been impossible. Doctors can monitor patients remotely, lawyers can offer counsel online, software can complete your taxes for you, and even financial investments and advising can be made without any face-to-face contact. To some this would sound ludicrous and to others it sounds convenient, but one thing is for certain—the robo-advisor is another option.
Yet, the need for the walking-talking financial advisor with an office, not a GB of app space, is still present. Many people naturally feel more comfortable with a human they can look in the eye and trust to make important financial decisions rather than tossing money into the void that is the internet.The human financial advisor has experience. Sure, the robo-advisor is programmed to do a specific number of tasks, but it can never have the real world experience of someone who has, say, led clients through a financial crisis like that of 2008. In the same way the robo-advisor is purely objective, the human advisor has innate subjectivity that can come in useful. In times of economic uncertainty, a real world financial advisor can act as a voice of reason against pulling out all investments regardless of the overall detriment that may occur. Financial advisors are also superior at looking at the big picture beyond just the monetary aspect of your life. They can incorporate elements like your estate plan, trusts, taxes, debts, and any long term monetary goals that may make your situation different than the more typical.
Also, a traditional financial advisor can complete investment strategies that require more than an algorithm. Tactics like purchasing individual stocks or dealing with options from an existing portfolio can go beyond the scope of what robo-advisors offer.
There are some benefits of utilizing a robo-solution. They tend to have low costs and decisions are driven by (presumably) scientific algorithms. Advisors can take advantage of the new technology as a proverbial tool in their tool box. Rather than robo-advice being a competitor to the traditional wealth manager, perhaps it is another tool, like email or smart phones, that advisors should use to deliver the best possible outcome for their clients. At Connecticut Wealth Management, that is our approach: to find ways to continue to deliver the best independent, objective advice in a form that produces the best possible result.