Financial Advisors and Robo Advisors

Robo Advisors show a hand and mechanical hand pointing at a globe.

By Kris Maksimovich, AIF®, CRPC®, CPFA®, CRC®:

Many people rely upon financial advisors for their wealth management needs. We are often asked about the differences between financial advisors and robo advisors. When it comes to answering this question, investors should do their research and understand what they are getting into with both types of services.

Understanding What You Get

There are many nuanced cost benefits to using a financial advisor like financial gain, risk reduction, enhanced well-being and monitoring and helping you adjust your investment behavior that robo advisors do not.  Below, is a breakdown of the differences between financial advisors and robo-advisors. We hope you’ll find this list helpful on your journey to investing:

Financial Advisor:

  • Offers financial planning, tax planning and wealth management
  • Processes and manages emotion and behavior
  • Helps prioritize and track goals
  • Helps ensure accountability and flexibility
  • Adapts to life changes and outside information
  • Sees nuances and extrapolates trends
  • Removes fear of conducting transactions online
  • Offers direct human contact, individual care, a relationship and can answer questions
  • Can work as a team with your other trusted advisors
  • Enables a measure of control
  • Creates investment flexibility
  • Is helpful for investments that reside in your 401(k)

Robo Advisor:

  • Offers a one size fits all solution
  • Lacks personalization
  • Is best used with a good understanding of investment fees
  • Automates the online processes for investors
  • Relies on artificial intelligence and algorithms
  • Lacks input
  • Displaces advice management
  • Doesn’t offer hand-holding in bear market
  • Offers no tax planning
  • Offers no succession planning for business owners
  • Lacks individualized advice and guidance
  • Presents risks which include flaws in algorithms and lack of accountability
  • Creates privacy and protection concerns

We’re always happy to speak with you and answer your important questions if you are searching for a financial advisor near you.

Read Is it Worth the Fee to Hire a Financial Advisor?

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Kris Maksimovich is a financial advisor located at Global Wealth Advisors 4400 State Hwy 121, Ste. 200, Lewisville, TX 75056. He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. Financial planning services offered through Global Wealth Advisors are separate and unrelated to Commonwealth. He can be reached at (972) 930-1238 or at info@gwadvisors.net.

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