Is Robo Advice Better Than No Advice?

By Michael Kay via

The proliferation of Robo-Advisors bringing low priced financial services out into the market has received significant buzz over the past few years. As is customary with all new things, one must ask questions before buying into it. As a Certified Financial Planner, my question is: Does Robo Advice have true value to the average consumer? My answer: A definitive “maybe.”

The road to good advice lies in a tangle of issues that can easily sway the answer from a strong “avoid at all costs” to “yes, there’s value there.”

According to Wikipedia, “Robo-advisors are a class of financial advisers that provide financial advice or portfolio management online with minimal human intervention. They provide digital financial advice based on mathematical rules or algorithms.”

Let’s examine the premise. With Robo-advisors, Financial Advice or portfolio management is provided at a low cost, typically requiring low minimum investments. So far, sounds like an attractive deal for consumers.

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