Robo Advisors vs. Financial Advisors – Which One Should You Use?

Daniel Penzing
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When You Should Use a Robo Advisor

The terms robo-advisor and financial advisor are often used interchangeably, but the two do not refer to the same thing. In fact, some financial advisors will tell you that robo-advisors are their nemesis while others will openly admit that they do believe robo-advisors provide a valuable service.

Those who appreciate robo-advisors are typically young investors without access to sophisticated financial know-how. Robo-advisors are a good fit for people who have some money to invest, but don’t know how to invest it. Robo-advisors can automate a lot of the investment processes, leaving investors free to make other financial decisions and, possibly, put more money into their investments.

Those who don’t like robo-advisors feel that they take a bit too much control out of the hands of the investor. With many robo-advisors, you set up the basic information about your portfolio, goals, and risk tolerance, and the robo-advisor will then automatically invest money into your funds based on this information. This has some investors worried that, as the market shifts, they may not be able to adapt to these shifts and their robo-advisor will be the one left holding the bag.

Our Recommended Robo Advisors

These days, you have a lot of option when it comes to finding financial help – both in making financial decisions and in helping you manage your finances. By far, the most popular type of financial advisor is the “traditional” person who sits down with you and gives you individualized advice (along with a hefty bill). But with robo-advisors, what you get is advice without the financial advisor.

So the obvious question is this – Which option is better? After all, robo-advisors may not have a physical presence, but they can still be quite expensive to use…if they’re not free.

In this article, we’ll look at robo-advisors and compare them to traditional financial advisors. We’ll examine the benefits of using a robo-advisor, the drawbacks, and whether or not they are right for you. Furthermore, we are also going to take a look at the most popular robo-advisors, so you can see what they have to offer.

When You Should Use a Traditional Investment Advisor

Summary

The technological advance of the digital era has been booming. Since the first website was created in 1990, the internet has been evolving with more content, more users, and newer technologies. Online retail, on-demand streaming services, Uber, and online banking are some of the result of such technology evolution. With the internet comes finance management companies, robo advisors to make financial portfolios, and online financial advisors to help individual investors. With the massive increase of financial information online, robo advisor is becoming a popular choice, especially for millennials.