Robo Technology is quickly advancing and changing the way advisors manage their investments. Used properly, automated financial advice can help independent financial advisors grow their firms better and more efficiently, more in line with an evolving new generation of investors. But there’s a fine line between utilizing Robo technology to further your investment experience and completely diluting the impact of human-led financial advice. Here are some important things to consider when considering how to utilize Robo advisors to your benefit.
First, ask yourself how you would feel if a technological breakthrough allowed a computer to understand your needs better than a human ever could. Would you be concerned about this new technology straining the relationship between you and your best financial adviser? If so, do not let your fears paralyze you from fully exploring the benefits of Robo technology. The fact of the matter is that most financial advisers have been dealing with this new technology on an almost stand-alone basis for many years. If they don’t use it, why should you?
Second, take some time to really think about what your ideal investment portfolio might look like. Do you want to supplement your traditional investment choices with Robo technology? Do you want to completely replace your current advisors? Only you know the answers to these questions, but take some time to think through what they mean for you and for your portfolio. You want your portfolio to be as strong as possible while also being as adaptable as possible.
Third, consider whether or not the use of Robo technology helps you grow your wealth faster. While this is largely dependent on the specific circumstances of your portfolio, one thing that is clear is that Robo technologies are quickly improving. If your company’s stock price is currently declining, consider whether you can find a technology that can reduce the losses you incur in order to help you grow your value more quickly. This is especially important if you have a product that helps clients benefit from asset-based investment strategies such as tax deferral or estate planning.
Fourth, take some time to think about whether or not you need additional investment vehicles to help you grow your wealth faster. If you have sound money management practices in place, this probably won’t be necessary. However, for those who are still relatively risk-free, this may not be enough. The point is that you should think about whether or not you need additional investment vehicles in order to achieve your investment goals. For most people, however, the answer is yes. Robo technology can help investors achieve their investment goals even when traditional advisors are unwilling to acknowledge their existence.
Lastly, think about whether or not your investment program needs to include a digital financial advice component. There are many instances when a customer relationship management strategy may be appropriate and effective, but a digital financial advice component is unnecessary. In fact, this component often serves to detract from an advisor’s effectiveness because it requires extra attention to detail. This extra work can lead an advisor to miss key opportunities to help you achieve your goals. Robo technology provides a way to skip this entire step and go straight to providing digital financial advice to help you get ahead.