// Robo Advisors: Whose Hand Are You Shaking? //

Author: Taylor Haney


I wouldn’t consider myself tech-savvy by any stretch of the imagination, but compared to my fellow advisors, I’d say I have somewhat of an edge. I’ve been fortunate enough to have relationships with three technology solutions in the wealth management space – specific to investment advice, administration, and compliance. Our industry has been ripe for innovation for years, and the latest technology and regulations have made keeping up with market trends all but inevitable for a successful business model.

“Robo can be a great technology model, but it has yet to prove itself as a great business model. I believe the human advisor is something worth betting on deep into the future”
– Aaron Klein, CEO of Riskalyze

As of right now, there are dozens of digital investment advisor platforms available to the public and even more available for advisors to use. As an investor/saver, you have no shortage of options to consider. What I find interesting is that research indicates that Millenials have been slow to consider robo solutions. It appears the early adopters range between the ages of 35-55. My average client happens to fall in that age band.

I personally use some technology platforms where appropriate, and clients are accepting and appreciative. We live in an age where some things can just be done more efficiently and at a better cost with technology. But, technology alone is not the answer. I agree with Aaron Klein (if you are not familiar with Riskalyze, here’s the short: they provide personal risk analytics as it pertains to investing). I’m betting on me, my associates, and the other warm body professionals that I know. Why? Here are three reasons I believe that advice cannot be fully automated:

1) Changethe only constant in life. You may get married, get divorced, lose your job, have an unexpected child, have your parents move in, become ill, win the lottery, or change your mind. No series of risk, financial, or personal preference questionnaires will fully understand your needs. I don’t believe retaking your risk score online will help you determine how much you should adjust your savings when your spouse tells you she’s pregnant.
2) Interactionhuman beings crave it.  Just yesterday I decided to go into the bank to make my deposits. Why? I thought I might see someone I know. We like to interact with others. I don’t know about you, but if I have serious health concerns, I don’t want a chat box online with generated responses. I believe financial concerns are no different.
3) Trust the most valuable business commodity. I don’t buy things from people I don’t trust. I don’t take health advice from someone I don’t trust. In fact, I’m not really friends with people I don’t trust. Can you trust a robot? Have you seen The Terminator?

I believe the best way to leverage technology to help you meet your financial goals starts with a warm hand shake. Technology simply cannot replace the real thing; however, it can enhance it. Technology has helped me reduce costs for my clients and my firm. It has help reduce human error. But at the end of the day, a working professional who cares about you and your family can never be replaced by a sophisticated algorithm.