Humans vs. Robots: When It Comes to Financial Planning, Robots Aren’t Better


If you’re one of the many people who utilize Alexa and Siri, you’re not alone. These days, dealing with computers is becoming the norm, which is why some people are beginning to rely on “robo-advisors”—automated platforms that use mathematical algorithms to provide financial advice and investment management services with limited or no human interaction. However, just as there are disadvantages with other types of technology (like that time you had to keep repeating yourself to Siri or Alexa accidentally called your ex), there are also disadvantages to “working with” a robo-advisor. Our (very human) financial planning advisors are here with three reasons why, when it comes to financial planning, robots aren’t better.

They May Be “Intelligent,” But They’re Not Interactive When it comes to robo-advising, you can typically only contact your “advisor” via email, online chats, or text messaging. Imagine this: you just experienced a life-altering event or your comfort level with an investment suddenly changed, but you can’t get an electronic response back from your robo-advisor—frustrating, right? In contrast, if you find yourself a financial planning team that genuinely cares about you, your life, and your wealth, then you can call them any time you have a question or concern about your investments. In fact, some financial planning advisors will even call you to provide you with an update. Why? Because they recognize how much faith you put into them and their services, and they want you to be confident that your finances are in the right hands.

What They Lack in Communication, They Overdo in Rebalancing Similar to other financial advisors, robo-advisors will rebalance your portfolio as the market changes. This means that if there’s a significant increase or decrease in your investments, your overperforming assets will be sold and underperforming assets will be purchased to replace them. However, excessive rebalancing can sometimes lead to excessive fees. To avoid this, it’s best to team up with a financial planning company whose humans won’t just provide you with rigorous portfolio monitoring, but they will also communicate to you how often they may be rebalancing your investments and why.

Let’s Get Real—Robo-Advisors Won’t Give You a Personal Experience If we’ve learned anything from the COVID-19 pandemic, it’s that many of us crave human interaction. So why eliminate that when it comes to your financial planning? Since robo-advising involves minimal to no human element, you’ll lose any type of personal connection—that means no face-to-face meetings in person or over Zoom, no personable phone calls, and no friendly emails. But whatever chapter you may be in—recently married, first-time homeowners, new parents, saving for college, prepping for retirement, retired—having a quality financial advisor who takes the time to get to know your story is crucial. Not only will this help them gain a deeper understanding of your goals and risk tolerance level, but it will also enable them to create a custom financial plan that’s tailored to you and your financial dreams.

So, perhaps it’s best to let the robots do what they do best—helping us make hands-free phone calls, answering our many (and sometimes trivial) questions—and leave the financial planning and wealth management to the humans. If you would like to get started with one of our financial planning specialists who will help you in real-life and real-time, then give us a call or schedule a complimentary consultation with them today!

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