Should we use Robo-Advisors? I don’t know, let’s ask Siri!

One thing on psychology, which we’ve always known, is that every investor says they’re long-term – and they are until the market takes a hit. 

-Steve Forbes

Any web search for “robo-advisors” (or robo-advisers, robo-planners, etc.) produces an interesting spectrum of content, from “for” to “against,” with a fair share of “undecided.”


Robos, good or evil?

We recently re-blogged Robo
Advice? Bring it on, it will be great for business

by Tony Vidler.  He says robo-advisors:

“will be good for business for those advisers
who provide real value and are smart marketers. 
The Robo’s will probably kill off the bottom-feeders in the business,
together with those who have no genuine advice-based value proposition.  Perhaps that is an unfortunate consequence,
but then, maybe it isn’t.”

We also reblogged Neil Wood’s
post “Are
You Prepared For the Tidal Wave Of Assets Going Into Robo-Advisor Programs?
”  He says:

“Remember the
stock jockeys of the 1970s-1990s that refused to embrace financial
planning?  Many call them dinosaurs that
died with a change in the way our industry did business.  There will always be new competitors in our
industry.  People want faster, cheaper,
better, improved, more powerful and a so-called better mousetrap.”

Threatened or embracing change?

Many posts are threatened by
new technology.  For example, the title
alone in the post by Sara Grillo puts robo-advisors in a
derogated status:  Why
a Robo-advisor is Like Getting Financial Advice at a McDonald’s Drive Through
.  More on Ms.
Grillo in a minute ….

Here is another, where the title
of the article by Craig Iskowitz sounds as if he thinks
robo-advisors are a passing fad: Dead
Robo Walking: Why Wealthfront is Doomed
.  However, he
provides real analysis of the new technology and differentiates the growing
field of robo-advisors, calling out Wealthfront as an advisor he
believes failed to prepare and execute well. 
Wealthfront may not do well, but Mr. Iskowitz sees it as losing out to
other investment firms, both robo or traditional.  (Also see Robo-Advisors may be just what we need!

Finally, there are some who purport
to be threatened but may in fact be carving out their own turf in the
robo-advisor space.  Ron Lieber believes that is what JP Morgan
is doing.  See “Jamie Dimon Wants to Protect You From
Innovative Start-Ups

As I said in What
is a financial plan?
, that those who insist that robo-advisors will not replace
individual, human
planners comprise the “There’s no app for that” group.

Hold on, Steven.  This is Siri. 
What about me?  Where do I fit in?

Well Siri, you are
a robo-voice, not an advisor.

But you ask me
questions all the time!

Yes, I do.  But I don’t count on you for life-changing

I’m hurt!

Enough!  As promised, back to Sara Grillo.  In the end, she thinks robo-advisors:

“are a good
way to get financial advice for those who have no emotion attached to their
money, a long time horizon, and simple requirements.”  However, if you
need more attention, then she expects you to pay a human for advice, despite
the $500,000 portfolio minimum threshold barrier. 

Should that be the cutoff?  You have to already be wealthy to get good
advice?  We think it shouldn’t.

Imagine that, as a financial planner, CFP or other advisor,
robo-advisor technology frees up more of your time.  You could use that time to provide more
advice to clients or to advise more clients.  Just like the introduction of word processing and
desktop computers in offices decades ago, technology brought efficiencies and
created a massive shift in how we use time.  

Or Imagine that we can create a robo-advisor website that will provide
the sort of advice that a human would, even encompassing the issues Ms. Grillo
suggests: “complicated trust and estate issues, a need for cash flow planning.”  This is my hope for the website we are
building, that we can make the essence of human financial planner advice
accessible to those who made need it most, who have not amassed great wealth –

Technological change comes in many forms and constantly evolves 

Change is a constant in our lives.  Those
who resist are often buried in the process – Neil’s dinosaurs.  Those who would adopt and adapt fare far

Don’t you agree Siri?  Siri? 

I’m not talking to you until you apologize

Oh boy.


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