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Robo-Advisors vs Financial Advisors: Who Wins?

The Case for Robo-Advisors

Robo-advisors are gaining in popularity across the country. And for some, they are absolutely suitable. It’s easy to open an account with a robo-advisory firm – they have low fees and require little to no attention, and they are great for beginners with little in upfront investable assets.
But here’s where they are lacking – the human touch. When you sign up for a robo-advisor, all you generally do is take a quick risk-assessment questionnaire and put down the initial funding. From there on out, the algorithm makes trades with little to no input from the investor.
Though it may be hassle-free, the robo-advisor just doesn’t take into account the human condition – a person’s interests, changing financial goals, or major life events. It just chugs along, indifferent to the goings-on taking place outside of its narrow trading parameters.

Why to Choose a Financial Professional

On the other hand, a financial advisor has experience working with people from all walks of life and possesses a wealth of financial knowledge. Each consultation begins not with a quick thirty-second risk assessment, but a thorough process to ascertain your overall financial goals, investment horizon, and risk tolerance, discover the nuances of your unique financial situation and determine the best short- and long-term investment paths for you.

Flexibility

Every possible scenario is taken into account, scenarios you may not even envision yourself. And when life throws you a curveball, a financial advisor has the skills to adapt your retirement accounts to any new situation in the most effective and efficient way possible, whether it be through portfolio adjustments, a reallocation of assets or putting your money in a different investment vehicle.

Availability

Another major benefit of having a financial advisor is the ability to reach out to them. Whether it be through an email, a quick call, or even an office visit, we’re always accessible. For instance, maybe you’d like to find out more about how a new law will affect your financial situation, maybe you have a new financial goal, or maybe you just want some reassurances after a particularly volatile market day. We also provide timely market information, changes to financial law, and informative blog posts and emails to help keep clients highly informed and engaged.

In Conclusion

At the end of the day, a robo-advisor is just a money-management tool, while a financial advisor can consult on a slew of topics, from tax and estate planning to exercising stock options or purchasing some form of insurance. Take a look HERE to see just how many services we offer, many of them beyond the scope of a one-dimensional robot advisor.

About the Author

  • Douglas Walters

    Doug is the Managing Partner of Walters Strategic Partners, LLC, a licensed Registered Investment Advisory firm. Doug is a licensed Certified Public Accountant (CPA) in the state of Florida and holds a Series 65 Investment Advisor Representative securities license. He is also a member of the AICPA. With over 28 years of experience as a CPA, he believes investment decisions should be based on decades of peer-reviewed research rather than relying on the latest “hot tip” from media outlets. This empirical evidence puts the science of investing to work for his clients.

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