How Do You Know Which Robo-Advisor?
John C. Brandy, CFEd®
Here's a frequently asked question that's so important I decided to write a separate piece about it.
I presume you know what a robo-advisor is. If you didn't you wouldn't have searched for and found this. But that's not the whole question.
There are many different robo-advisors from which we can all choose, so what do I do for myself and my customers?
How To Choose
First things first: what do you want to achieve, and how do you know you can do that with a robo-advisor?
It could be that you want to have at least part of your investing be tied to your personal outlook on things. Maybe you want to focus on a basket of stocks with proven results, like Apple or Google.
Maybe it's battery-powered cars or solar panels. Perhaps it's retail or dividends like Amazon or IBM. Then again, it could be Initial Public Offerings, or IPOs.
One Option You Have
Motif is an automated trading platform in which
you can choose to focus on one or more specific
"Motifs", hence the name, where a "Motif" is
built from stocks having a common theme, like
"Big Data" or "Housing Recovery".
They also offer some IPOs which you can get into
without having tons of money already.
What Else Could I Choose?
Great question! Many people choose a robo-advisor named Betterment. I like this one as well, and for a different reason. Betterment's strength is in helping us behave in the same manner as proven successful investors so that we can reach our goals. That's no small feat I should point out. Our behavior as people will always default to sharing the outlook of the people we most identify with and most people don't save enough.
This gets us to take away that limiting belief and openly consider the possibility that we can all become well-off, whether that's financially or socially or any other way. Should that be the bulk of your portfolio? Nope. Nothing should, unless you have that often-rumored but never seen "crystal ball". It's a great part of the picture, though.
Any Other Possibilities?
Yes, and very likely there will be even more down the road. A third choice I like is another popular robo-advisor named Wealthfront.
Wealthfront's strength is in their focus on"passive investing" in which the money you place with them is invested in mostly indexed mutual funds and ETFs.
This can save a lot of cost and is the entire premise behind John Bogle's Vanguard Funds. Assuming good years in one or more of the markets, you can do very well with any kind of advisor, so keeping your costs down makes a lot of sense.
Would You Do This With Your Money?
Well, yes, and in fact I do. Here's a screenshot
of part of my portfolio with Motif. In
case you haven't heard, I put my money
where my mouth is. I wouldn't suggest
you do something if I wouldn't do it myself.
OK, But What's The Bottom Line Here?
The bottom line is that you have to be involved. These are your goals. This is your savings toward those goals. I know what you need to do and I can nudge you in the right direction. I can warn you about whatever might befall you in the future, but I cannot make you do it if you don't want to.
So, if you want to get started with success, whether that comes to you through robo-advisors or something else we do here, like real estate, BitCoin, self-directed IRAs or crowdfunding sign up right here to get started.
Want to ask me a few questions one-on-one for free first? I totally get it. Click here to put that time on my calendar and we'll go from there
Conclusion: You Want One Or More Of These
Because they will help you spread out your risk and diversify your returns. The secret to financial success is Multiple Income Streams, in other words money coming to you from many different places all at once. If something happens to any of them, it doesn't have to change your world.
You can be in control. My job is to understand what motivates you and meet that need while diversifying to manage your risk.
Together we paint a picture for you and your family and help you do things you didn't think you could do.
If you have any questions, feel free to reach out to me at email@example.com.
About the Author
John Brandy is a Certified Financial Educator (CFEd®) and a financial consultant who helps you achieve your retirement goals. He is an expert in investing using this platform. Contact John if you have any questions about using regular or retirement funds this way. He is happy to talk with you to discuss your investing goals.