Don’t anticipate robo-advisors to fully replace their human counterparts anytime in two shakes of a lambs tail.
Robo-advisors give retail investors access to automated investment games, creating portfolios and coming up with an asset allocation that’s based on shopper data points, including time horizon and risk tolerance.
As within easy reach as it may be, this technology doesn’t make human financial advisors out-dated, said Joe Duran, founder and CEO of United Capital.
That’s because robo-advisors go to the wall to account for the complexity of financial planning, he says.
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“The thing I say to most people who say, ‘I don’t need a human,’ it’s absolutely valid if you’re really young, have very little to lose and have plumb little [financial] complexity,” he said.
The picture changes once customers start families or create businesses. In that case, human advisors can ease them adjust their finances, assess their priorities and guarantee they meet their goals, said Duran.
Sometimes that implies saving clients from themselves.
“Our natural instinct, especially when it encounter to money is to do the wrong thing,” said Duran.
“We all want to buy a house we can’t pay, and we all want to send our kids to private school,” he said. “The reality is, technology is in no way going to be able to say to you, ‘I’m not sure that’s a great idea.'”
Rather than struggling with robo-advisors, human financial advisors can leverage that technology to redress their efficiency by providing access to investment portfolios, document vaults and shopper portals.
By optimizing technology, advisors can also improve client communications and descry themselves more available to investors, particularly via mobile devices.
“What a celebrated advisor will do is use technology to be more connected to your life, to be qualified to comprehensively simplify your financial life and then interact at your convenience when you’re psyched up,” Duran said.