Broker Check

Retirement Income Don'ts: Robo-Advisors

| September 16, 2019
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Robo-advisors have been receiving lots of undeserved praise lately as a method of investment management mainly because of their low fees. But, as with many things in this world, you get what you pay for. 

What is a robo-advisor?

A robo-advisor is an online tool that uses computer algorithms to manage investments. Some are fully-automated while others have some human support. Both models deliver customer service in some capacity to assist with the investing process. But, a robo-advisor's main "claim to fame" is it's an automated system that will remove the emotion from investing allowing the algorithm to make sound judgments based on trends at a lower cost.

Here are three reasons we are not fans of robo-advisors and why they shouldn't be used for your retirement planning.

{AUDIO} Retirement Income Don'ts: Robo-Advisors

Algorithms only go so far in investing

Robo-advisors can't get very granular when choosing the right investments. There is a lot that goes into deciding the right kind of investments for your portfolio. We have a very strict policy statement when choosing funds and we adhere to it. In fact, our investment committee meets regularly to discuss and dissect the investments for our clients' portfolios.

There's more to retirement than investing

Investments are just one piece of the retirement puzzle. We run every client through a worksheet that covers the 8 Wealth Management Issues which addresses everything from family risk management, business planning, education planning, cash flow and debt management to legacy and estate planning. There's no way for an automated robo-advisor to take these wealth management issues into consideration when investing.

Robo-advisors can't help you find purpose

We believe retirement can be and should be the most purposeful season of a person's life. Many times our team acts as "retirement coaches" not only helping clients deal with the financial side of retirement, but helping clients have more impact on others. Robo-advisors will never replace the human-to-human services we provide clients helping them have purposeful and fulfilling retirements.

If you are considering a robo-advisor, we would be honored to show you the value we can bring to your retirement plan.

Please, give us a call at 320.222.4236 or click on "Request a Meeting".

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