In the past, you had to seek the services of a specific finance professional that helped you meet your set financial goals. The growth of technology has led to the development of Robo-Advisors that perform many functions that financial advisors performed in the past. However, distinct differences exist between a Robo-Advisor and a financial advisor.
The first interaction between a Robo-Advisor and a client takes place online. You only have to fill a survey or questionnaire that communicates your long-term goals and objectives. The step takes a few minutes for you to open an account a start your financial investment journey. On the other hand, you require a meeting with your financial advisor to employ a professional's services. The first meeting helps in communicating the financial goals that you have. The financial advisor understands your goals while also taking the opportunity to know you as a person.
A Robo-Advisor maintains the interaction as a professional. You only interact with a Robo-Advisor when you require advice on your investments or maintain your portfolio's progress. Conversely, financial advisers offer you a relationship that expands beyond the work setting. A financial advisor has to know you as a person for them to advise you accurately. A financial advisor can show up t your lunches and at your home to understand the short, mid, and long-term objectives that you have concerning your future.
Lastly, Robo-Advisors offer sound financial advice at a lower price compared to financial advisors. Financial advisers provide a human touch, asking for higher fees than a Robo-Advisor would ask for. Moreover, many Robo-Advisors offer advice on investments while financial advisers advise you on overall financial well being. The opinion is not limited to securities and bonds. Financial advisors provide you with quality advice that teaches you how to invest now and when you retire.
Overall, primary differences between a Robo-Advisor and a financial advisor arise from human interaction and the span of control. Robo-Advisors lack a human touch to advise while financial advisors become more than best friends. Financial advisors are always on call and offer long-term advice compared to Robo-Advisors. The choice of advisor depends on the preferences that you have the objectives that you wish to achieve when hiring a professional.
I've read recently in an article that emotions are where a traditional financial advisor takes over a Robo-advisor, and I must say that I agree with that. Robo-advisors only have one job, to use algorithms to manage your investment portfolio. They are not designed to manage the emotional component of investing and building wealth. For traditional advisors and retirement planner such as the one from https://www.grimardfinancial.com/, this is a daily role they fulfill. When markets decline or clients experience an important financial event, the traditional advisor is there to talk them down off the proverbial ledge and help them make a rational decision void of strong emotions.
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