Wie erklären Sie Ihren Kunden Robo-Advisor? (2024)

Robo advisors allow an individual to more effectively allocate their money into a diversified investment portfolio that takes into account their risk tolerance (conservative to aggressive in the form for higher/lower stock/bond allocation) and their financial goals in an automated cost effective manner. What was once a tool you had to pay a financial advisor for you now can directly get access to utilize yourself. Plus its automated nature means for those without much time or experience can also enjoy its benefits with their long term investments. It’s not perfect but it does benefit those who don’t have access to a financial advisor or those who may be cost sensitive.

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It’s really helpful for those set of customers who want tailored solutions which is backed by historical data and risk appetite.While, there are multiple factors which doesn’t solve the robots specially in the financial industry.Personal relationships gives more confidence along with sense of responsibility to attain the financial objective.While, mix of feelings( Data+gut) contributes better results in long term, as sometimes people vet on founders and their ideas not only on the balance sheets.

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While some people might argue that having no emotions, less biases or conflicts of interest is good, I believe this view is not quite accurate. Let's start from the beginning: why might someone want to use a robo-advisor?Typically, the decision implies an intent to manage one's wealth. Wealth management is a sophisticated concept, involving not only financial assets but also life goals, behavioural traits, and personal experiences. To an extent, it is rooted in emotions because they bring 'vitality' to life.Therefore, an adviser who can offer analysis incorporating an individual's life story, motivations, and emotions could potentially outperform an AI that neglects to take these elements into account.

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Working with technology is great… but working with a person who can empathize with and navigate the situation properly is the best course of action. My company doesn’t charge clients to sit down and work through their financial decisions and we find product with minimal fees involved to begin with. Being non-captive has that advantage, and we are available whenever our client needs it.

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The main benefit of a robo-advisor is that they charge lower fees, although a broker that provides a robo-advisor to its clients may decide to offer additional perks and features as well.

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The 2 major benefits for robo advisors are: 1) Automated 'guided' investing: For those who don't have much time to manage their investments, not much knowledge in investing or restrictions in what they can invest in (like employees at financial institutions), robo advisors can help offer the guidance they need for their longer term diversified investment (especially if they don't have access to a human advisor). 2) Cost effective: Robo advisors generally charge less than 1% relative to human advisors who will charge more. Investors should be aware that fees really matter. E.g. If you invested $100K (assuming 6% return) for 40 years a 1% extra fee can be the difference between earning $1 million vs $700K ($300K difference).

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Humans make mistakes, machines can make blunders! While working with Robo- Advisors, it is still important for the customers to apply their layer of common sense. Perception is reality! The role of a financial advisor in my opinion is give confidence to investors & not really about just helping them choose the right investment vehicle. Will humans develop enough trust in a robo-advisor is anybody's guess

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Robo-advisors often select a default portfolio for you by asking a few basic questions about your comfort with risk and your need for money in the near future. It's unlikely that they'd be able to provide useful advice to help you deal with more complex situations.

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You choose a robo advisor much like you would choose any investment manager based on: 1) Whether you comfortable having a machine manage your money or automating a portion of your investments2) It's performance track record3) Whether the robo advisor is backed by reputable companies/managers 4) Whether it meet or address your investment needs (since some robo advisors may be built differently)5) Are the fees reasonable6) Whether the robo advisor platform has other solutions so you can 'grow' into them as you become more experienced

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An analytic can appreciate the access to information and the low cost to access it. However, people who have different social styles might need the human interaction that helps them tie their investment decisions to funding their children’s college education, their weddings and their retirement. They need a sounding board for strategic planning. A robo-advisor can’t do that.

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Explaining robo-advisors to customers? Picture it as a Financial GPS. You input your financial goals and risk tolerance, much like entering a destination and preferred route. The robo-advisor, using algorithms and real-time data (the GPS satellites), navigates the market’s twists and turns, offering directions (investment advice) to keep you on the right path toward your goals. And much like a GPS re-routes when you take a wrong turn, a robo-advisor adjusts recommendations based on market changes and personal preferences, ensuring a smoother journey to financial success.

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Robo advisors are built on the idea that the system, as it stands now, is functional. It is not! If 85% of Americans have chosen not to work with a financial advisor, there is something wrong- but there is also an incredible opportunity! For example, do risk profile questionnaires accurately identify an investor’s risk tolerance. No! The same family who is asked these questions in 2023 and in 2020 will give completely different answers to these questions based on their feelings at that time. Remember, all future allocations are based on THIS profile. How about the concepts of budgeting or net worth? All of these concepts are broken, which means the advice received from a robo-advisor could be wrong as well.

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One major thing that I find missing in Robo-Advisors is that while creating a risk profile of a customer, they tend to take into consideration the current scenarios on which all the reccomendations are provided. What is not factored in, is the evolving personal-finance scenario of the said customer and factoring the same in the long term investment recommendaction. Also a rule of them should he to refresh the customers risk profile regularly so as to factor in the most recent risk appetite and rebalance the existing portfolio if needed while risk-adjusting future recommendations.

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