Do I need a robo or traditional advisor?

With the boom in financial technology over the past several years, you as an investor have more options than ever before when deciding whom to manage your money. Not only can you use a traditional financial advisor (a financial services professional who provides investment advice to clients), you can also choose from dozens of digital advice services (often called robo advisors).

How you make this decision depends on a number of factors, including the level of your investment expertise, the complexity of your financial situation, how much financial advisor interaction you prefer, and more.

Traditional advisors may be a good option for some

For many, finding a human financial advisor can still be a great option. Not only can you receive face-to-face, personalized financial planning and investment advice, but this relationship can also provide you with a trusted person to walk you through all the details and complexity and answer any of your questions. For some people, having a sit-down meeting with a financial advisor also may be what they need to stay on track to achieve their financial goals.

Digital advice platforms are transforming the industry

On the other hand, more and more people are becoming comfortable with digital-only services. Just as ATMs and online banking transformed the traditional in-person banking experience many years ago, so too have digital advice platforms transformed the world of financial and investment advice. For many investors, a digital service may provide the financial planning and investment services they need along with the instantaneous responsiveness and simplicity of a website or mobile app.

Your preference may depend on your financial picture

The decision between human and digital advice depends strongly on your personal preferences. But there are other important differences as well. If you have a very complex financial picture, such as detailed tax considerations or non-traditional assets, you may still require specialized human expertise to manage your investments for some or part of your financial plans.

In addition, fees can differ significantly between human and digital-only advice. If you have less-complicated financial planning and investment needs, digital services may provide most of what you need while minimizing costs.

The intersection of human and digital advising

The investment industry is evolving quickly, with robo advisors gaining popularity among investors looking for a modern, convenient approach to investing. Additionally, many traditional financial advisors are adding digital capabilities, and many digital platforms are offering human support as well! Finding the right approach for you depends on your needs and personal preferences.