In scouring the Internet or in reading trusted news publications, you many have heard the term “robo advisor” used to describe a new breed of service providers who use the web to deliver investment selection and portfolio management.
While there are certainly people working at the “robo firm”, there are some important differences. It is important to note that RamseyInvesting.com is not a robo service.
What’s the difference between a “real” advisor and a “robo” advisor?
Most often, robo services use algorhythms and pre-programmed software-driven investment models as the primary mechanism for creating portfolios for real a human being (that would be you!).
At RamseyInvesting.com, we use the web to facilitate conversations, not replace them. We use technology to enhance our expertise, not replace it.
Some robo services route investors to a call center, where they may not ever speak with the same person twice (the call center employee simply looks up the investor’s account details and tries to talk through the query “cold”.)
At RamseyInvesting.com, we make ourselves available to our clients over the phone and email. We want to know their stories – their goals, dreams and objectives – not just the data. We ask tough questions and encourage our clients to talk about their financial lives. We’re prepared to guide our clients through unexpected life events, and will always try to steer them in the right direction. We identify risks in client portfolios that might have been overlooked. We talk people off ledges and help them stay the course during market volatility.
Most robo services are founded by financial services professionals (and their business investors). Few hire real people with the right credentials and expertise to provide meaningful one-on-one interaction.
At RamseyInvesting.com, we have worked as personal financial advisors and relationship managers for many years. I’ve personally selected and trained all my staff members. This is all we do: help people make smarter decisions about their money and how to invest it. As human beings, we have credentials that show our expertise and must continually adhere to industry standards that say we must put our clients’ best interests first.
Can a robotic, non-personalized service compete with a real human being? We think not.
At RamseyInvesting.com, we are genuinely concerned about our clients’ financial comfort, security and happiness. We understand what our clients are going through because we’ve been there too.
Who wants to work with a robot? Not me. How about you?
Karen Ramsey, CFP, Founder of RamseyInvesting.com 
Training Wheel analogy:
Now, I’m not saying Robo-Advisory firms are exactly like training wheels attached to a bicycle, but in a way, they are. Many traditional advisory firms have high minimums. $250K, $500K, $1 million an more are common minimums for traditional RIAs. Some Robo-Advisory firms start at zero $0, others at $10K.
In my world, a much higher percentage of my younger (and some older GenX, and sadly, baby boomer) friends do not have $250k. They want an advisor but up until now, they had no choices. Robo-Advisors will fill that need. In a sense, they will act as the training wheels for the Millennial (GenY and/or older) clients. As they grow their nest eggs, and their family or tax circumstances change, they can move to the traditional RIA firm.
Robo-Advisory firms can act as the stepping stones, eventually bridging clients to traditional ”human” advisory firms.
Just throwing in my .02 cents of thoughts here…….
Marty Morua