In the past whenever we wanted financial advice or help with investments, we would visit an financial investment advisor (FIA) or wealth management consultant to discuss our requirements and needs for our financial betterment and retirement planning. A lot of people still do appreciate the value of having a close and personal relationship with their financial advisor, enjoying the trust and bond that is built up over time with them. Having said that, there is fast becoming a move towards online investment services, which does eliminate both the personal relationship you have with your FIA, and reduces a lot of the costs involved.
Online Investment advisors, commonly referred to as ‘robo-advisors’ (although the industry does not like that term) offer investment management away from the boundaries of a traditional FIA’s office environment.
The main difference between the two, a personal advisor and a ‘robo-advisor’ is, of course, the human element, but additionally whereas a personal advisor will be there to talk you through your financial planning, robo-advisors will take your information, offer you suggested services to meet your form filled goals, and away you go.
Online Investment advisors use the latest algorithm and performance related charts, to advise to the minute, what are the best investments for you. They offer a fast service and cover the same investment platforms as FIA’s, such as ETF’s stocks, mutual funds, bonds, IRA’s etc. You can also, depending on which online advisor you use, you can also receive asset management, investment advice, financial planning, portfolio management and analysis. Plus there are a number of online services that will manage your investments too.
The simple and short answer is, no they are not. A lot of FIA’s actually use online investment services to help them provide a full and extensive service for their clients.What online investment advisors provide is the option for every person, no matter what their current financial status, to start and manage their own investments at a level and pace that suits them. The commissions charged are a lot less than those charged by personal advisors, so there is a money saving element to them as well.
I personally like to use both online investment advisors and an FIA. Having both helps me to find and manage the best investments the way I like, but for those who are technologically advanced and like to do things themselves, using online investment services is a good choice.