Robo-advice vs. Advice
I’m a financial adviser and I’ve been hearing a lot of talk recently that we’re being replaced by robo-advisers. Certainly, a fundamental change is about to sweep the Australian market and advisers have to move with the times… But, I’m not going out to look for another job, just yet.
I’ve seen this before… My previous career was in tertiary education. One summer’s day, my colleagues and I were assembled by an expert who told us that E-learning was going to make us redundant. The computer could deliver far more engaging content and our days were numbered. This prediction was made more than a decade ago, and yet teaching is still a thriving profession based on mutual trust and respect. Successful teachers retain a strong relationship with their students and cherry pick the best aspects of the new technology for their benefit.
Robo-advice certainly simplifies the investment process and delivers market-matching returns while saving on brokerage, and taxes. It is a useful tool, but it doesn’t replace financial knowledge. It makes decisions according to an algorithm, but it doesn’t take into account the big picture or hold the client’s hand in times of uncertainty. This is where the financial adviser is indispensable.
Just like a good teacher, a good financial adviser has a strong relationship with clients. A successful adviser has taken the time to earn the client’s trust by understanding their goals & circumstances. The relationship is the key to overcoming adversity. If the market nosedives and the newspapers are predicting Armageddon, the professional adviser says, “DON’T SELL, and this is why…”
In today’s information-driven world, your financial adviser is no longer the “Sage on the Stage”- she doesn’t know everything, but she knows everything about YOU. She provides the information you need and explains it in terms YOU can understand. Your financial planner is your “Guide on the Side”. Year in and year out, she’s here to help you take advantage of all the latest technology, including robo-advice.
When it’s your future and your life-savings, there is no substitute for good advice.