HBW Advises Continued Investor Caution With Projected Worldwide Hybrid Robo-Advisor AUM Of $3.7 Trillion by 2020
When Betterment introduced its first robo-advisor in 2008 during the terrifying beginnings of the Great Recession, it was meant to empower investors by making an existing wealth-management technology widely available to the public. Although "pure" robo-advisors (totally automated, DIY) are predicted to be managing 1.6 % of global wealth by 2025, a much more significant 10%--
The reservations concerning a robo-advisor are due to its tendency to be a one-size-fits-all approach. Based on the profile established by an online survey, an individual investor becomes a member of a large demographic group which is given investment advice based on an algorithm. As an example, robo-advisor Vanguard manages
"The risk with billions in assets going into the same, or similar investments, is that millions of investors all get the same results. This is generally okay when the performance is good, but when performance is down, it's human nature for investors to sell. Everyone selling the same investments at the same time creates a cascading effect," Streiff warned.
Despite the recent proliferation of large players using these services (now including
An experienced investor's long-term relationship with a financial advisor is based on mutual trust, and includes an understanding of the client's unique family concerns as well as personal and professional goals. "The relationship's value increases over time," said Streiff. "While the current robo technology can be a useful support tool at times, when facing a critical investment choice based on a family crisis or a sudden downturn or market correction, the well-informed investor wants to avoid disastrous results by consulting a professional advisor."
Across the entire spectrum of investors, 38% say they would willingly pay more for access to a person for help with financial services, and 45% say they would not be willing to give up live customer service in exchange for paying lower fees.(3)
Any advantage a DIY robo-advisor might provide--whether it is 24/7 availability, a low annual fee, a minimal account balance, etc.--has been created by removing a live financial advisor from the equation. This cost consciousness can result in classic 'penny wise, pound foolish' thinking. Even in some hybrid service scenarios where advice can be sought out, the client/advisor ratio can be as high as one advisor for every 10,000 investors(2).
About
Established in 1991,
Through partnerships with many significant providers across all aspects of the industry, they have made available state-of-the-art technology such as facial recognition tools, financial planning software, client acquisition programs, and business planning tools to enhance the client experience, manage risk and increase productivity.
Their motto is "Character and Quality Above All". Autonomy, Mastery and Purpose with Trust is the basis for everything they do. For more information visit http://www.hbwpartners.com/.
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Read the full story at http://www.prweb.com/releases/2018/01/prweb15067617.htm
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