In a world where commoditization of products and services appears to be the norm, I do hope that the successful marketing of robo-advice will not see it become the most common form of financial advice for consumers.
Some of you will be asking, what is robo-advice?
The Wikipedia definition of robo-advice is “a class of financial adviser that provides portfolio management online with minimal human intervention. While their recommendations may vary, they all employ algorithms”.
For some people in the early stages of their working life this type of offering could be perfect.
For me, I do not want my retirement planning managed with minimal human intervention. I want to be able to talk to someone; to discuss my dreams; listen to their opinions, and have them tell me when they believe I am wrong. I want to match my individuality and personality with who they are and what they have offer. I want to like them, and I want them to like me.
I certainly do not want any recommendations about my future based on a mathematical formula – I am an individual!
Well, I believe I am. I don’t necessarily want to be part of a crowd of people who all look the same, have the same interests, the same opinions, the same goals, the same attitude to life and the same approach to investing and retirement.
I want to be treated as an individual whose circumstances are considered and taken into account in the services being offered to me, for which I am paying.
Generally I would not be looking for the nearest “Golden Arches”, although I have certainly sought this option when I am on the road, hunger strikes and I looking for something quick; but it is not my “restaurant” of choice especially for those special occasions.
When I do go out for a dinner, breakfast or lunch, I want to be able to choose my meal from a number of different options on a menu and if need be alter the meal by adding or subtracting e.g. extra bacon, no hollandaise, or my steak cooked medium rare.
So for me, at my stage in life and with what I want to achieve, robo-advice is probably not a suitable option.
I want the extra bacon, the medium rare steak and to select my meal from a comprehensive menu and to ensure that I have a suitable wine to match my meal; sounds very snooty I know.
But more importantly I also realize that if I want individual treatment and someone who will listen and guide me, I do have to pay for it. Yes, robo-advice may be less expensive but I am an individual and I should be prepared to pay to be treated as such especially in the area of my retirement planning.10