There is one more benefit to the rise of robo - advisers that can't be ignored: it will
force human advisers to get better at what they do.
The services differ, but one thing they all share is a reliance on technology and a commitment to significantly lower fees as a result of
fewer human advisers demanding a cut.
The experts at both companies are obviously smart and qualified, but the services differ in that Betterment supplements the software
with human advisers.
Meanwhile, Betterment has a tiered pricing system and is suitable for investors who would also like to seek advice from
real human advisers.
Clearly a
commissioned human adviser can be influenced by self - interest due to sales quotas, trade commissions, bonus programs and so forth.
I have
shunned human advisers all my life but the Robo firms have professional data scientists and mathematicians focused full - time on building computer models maximizing the efficiency of your investment allocations.
Ultimately the decision between DIY, online service or
human adviser comes down to how much you're paying, what you're getting for that fee, and whether you consider that good value.
The package provides access to
human advisers as well as an automated managed account built with ETFs from Schwab and other providers.
Citizens Investment Services, a unit of Citizens Bank; Wells Fargo Advisors, the investment arm of the banking giant; and UBS Wealth Management Americas have partnered with robo adviser SigFig to pair their in -
house human advisers with robo technology that's tailored to each firm's clientele.
An innovative firm called Rebalance IRA uses a hybrid model that keeps costs low by
combining human advisers on the phone and technology online.
It rolled out two new plans in January that provide users access to a small team
of human advisers.
In the growing world of hybrid services, which marry digital advice
with human advisers, here's how to find the combination that suits your portfolio and your pocketbook.
The popularity of robo - advisers indicates a significant disruption in the fintech industry, and implies the need for
human advisers to embrace the new business model of advanced technology.
Often charging much lower fees than
human advisers, robo - advisers can offer valuable services, including automatic portfolio rebalancing and tax - loss harvesting (selling securities that have experienced a loss to offset taxes on both gains and income).
Agree that a relationship with
a human adviser can be messy and involve possible conflicts of interest.
Or you might consider Vanguard's recently launched Personal Advisor Services, which combines online technology that can create portfolios with access to
a human adviser for a fee of 0.30 % a year (not including the cost of the underlying funds).
After working with a traditional adviser for more than a decade, Ken Chin - Purcell, 57, decided to move his money to Personal Capital, a hybrid service that combines digital financial tools with
human advisers.
Some will have robo - advising (Wealthfront),
a human adviser (Merrill) or have none at all.
If you feel you need professional help to put together an investment portfolio, however, you might consider one of the new breed of robo - advisors that rely on algorithms to build and manage portfolios or a low - cost program like Vanguard's Personal Advisor Services that offers portfolio management as well as access to
a human adviser.
Fries argues it can be worth it to pay for
a human adviser.
If you find you're ready to take serious action or that you need help just making sense of things, Personal Capital will connect you with
a human adviser for a 1 % fee, getting you beyond the app to act on your financial goals.
One of the biggest names in retirement planning, The Vanguard Group, also sees tremendous opportunity in marrying digital products with
human advisers.
And it's not robotic: it's a hybrid model where
a human adviser uses online tools for efficiency but is required to meet all regulatory standards.