Robo-Advisors offer multiple benefits to individuals; however, they are not suitable for everyone. Some people might find it challenging to use the service depending on the personal preference of clients and the nature of investments that some clients have. Notably, three kinds of individuals find it hard to employ the services of a Robo-Advisor.
If you feel that you often require a human touch in everything that you do, you should not seek the services of a Robo-Advisor. Robo-Advisors offer a computerized approach to decision-making, which might feel stressful. The advisor primarily works on the internet and applies web-interfaces to interact and develop sound decisions with customers; you will not interact with a human advisor. However, if you deem it necessary to have human assistance while still using the services of a Robo-Advisor, you will have to pay additional costs that make the option expensive.
Additionally, if you have multiple investments, a Robo-Advisor would not work best for you. A Robo-Advisor is best tailored for advising an individual based on one investment account. Having multiple accounts, such as company accounts and personal accounts, complicates the decision making process. A Robo-Advisor cannot handle 401ks while also handling other investment decisions.
Lastly, if you prefer systematic investment advice, a Robo-Advisor would not be suitable for your needs. A Robo-Advisor helps manage your assets and manage different types of investment; however, it does not provide you with specific information. For example, a Robo-Advisor does not tell you how much you have to save or how to distribute your investments across different accounts. You would find it hard to diversify investments or make quality decisions by using a Robo-Advisor.
In Summary, Robo-Advisors do not meet the needs of everyone. You should not seek the services of a Robo-Advisor if you like a human touch in everything that you do. Human assistance requires additional fees to the usage of the Robo-Advisor. Robo-Advisors are not suitable for individuals who have multiple accounts since they do not support diversified investment decision-making. Lastly, Ro-advisors do not offer systematic decision-making concerning crucial matters like how much you need to save or diversify your assets.
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