Man v machine: financial planner or robo-advisor

I recently met with a reporter from Circa an online news website to discuss the benefits and limitations of working with a robo-advisor.

It was an interesting conversation and prompted me to consider how my clients are interpreting the new services and features of online financial advisory platforms. Robo-advisor or financial planner? As my granddad says, “There’s more than one way to skin a cat.” True, but let’s leave cats out of this.

There are many ways to manage finances, some better than others, and in 2019, there are many services that provide investment guidance, retirement savings recommendations, expense management, budgeting hacks and loan consolidation.

Wealthfront, Personal Capital, Betterment, SoFi, and Mint (just to name a few) are services I regularly recommend my clients engage with in addition to meeting with a financial planner.

The limitation of these services - they aren’t designed to provide customized advice, the algorithm cannot review your insurance needs in combination with your partner’s income and recommend how to pay down your student loan. These are conversations that take time and require open dialogue between client and planner.

It’s not an either/or comparison—there are seasons in your life where you don’t need financial advice but as you approach retirement or consider buying a house or a career change, a meeting with a financial planner will provide clarity and confidence to proceed down the best path.

At first glance, meeting with a financial planner may seem a bit more expensive than a robo-advisor however, in the case of Simplify Financial Planning, I charge a one-time fee and then you walk away clear, actionable steps. You know where you’re going, you know how to get there, and you have the confidence and support of a professional in your corner.