Many tasks that were manually performed for investing were expensive until robo-advisors were invented
What Is A Robo Advisor?
A robo advisor is software developed by investment management firms that take tasks that require expensive experts to manage and automate them.
Why Robo Advisors Are Good
Robo Advisors are good for one reason. They save you a ton of money by automating tasks like rebalancing, tax loss harvesting, auto deposits, etc.
Why Robo Advisors Are Bad
After going through the benefits of a robo advisor, you may be thinking it is a no brainer. However, there are some major flaws with robo advisors you need to be aware of.
Flaw #1: Risk Tolerance Based On Academic Theory
There is a ton of academic research on this topic. Unfortunately, most of that research gets blown up in the real world. However, people still use it to make real world decisions.
Flaw #2: Risk Tolerance Focused On Willingness
Robo advisors are still telling young people to put 90% in stocks because they have a long investment time horizon. This is why FitBUX launched their hybrid robot advisor service.
Flaw #3: Portfolio Investments
Robo advisors use modern portfolio theory for their investment strategy. The key to understand is that its not realistic in the real world.
Flaw #4: Black Box
Robo advisors are a black box. That means you have no idea about how they are managed but more importantly you have no one to speak to. That is why you can speak to a FitBUX Coach.
Robo Advisors are more efficient than a financial advisor especially if you are just getting started. Many financial advisors take your money then put it into a robo advisor for a fee.
Robo Advisor vs Financial Advisor
Are Robo Advisors Worth It?
Absolutely. Especially if you have a simple understanding of investments or you don’t want to be extremely hands on with your investments.
Investment Help Is Here
FitBUX recently launched our hybrid robo advisor just for you. We’ve helped young professionals manage $2.2 billion in assets and debt and we look forward to helping you.
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