This is an interesting article that clearly lays out how robo advisors, as well as digital advice platforms, have changed the game in terms of financial advice access for the everyday investor (and for many who'd previously have never been an investor).
Vanguard is a company that was founded partly on the proposition that given the right tools, simple and sound investing principles, and low-cost, quality products, the average person could DIY their portfolio without paying for expensive advice. This was true in the old-style financial advice landscape--when advisors would charge several % of your portfolio, and not even engage with someone who didn't have significant investable assets. Advice itself was never the problem--it was the fact that high costs, commissions, and lack of fiduciary standards ate away the benefit that the average person would gain.
Now, technology has made professional advice cheap and available, no matter your asset level. Not only that, you don't need to gather your bank statements and set aside time for an in-person appointment--you can get advice at your fingertips through a few clicks on your phone. And while some people remain well-suited to DIY, the truth is, most people don't have the time to do it properly: not the time to learn investing principles and trade-offs, not the time, energy, or willingness to consistently rebalance, not the time to understand tax implications or learn (let alone calculate) tax strategies.
And that's before you even get to what's often trickiest for investors--not what they do while they're saving, but what to do to prepare for spending from the portfolio. Plus there's also the large demographic of people (usually those starting out in the workforce) who find investing either too intimidating or too removed from their situation in life to start--despite being at a point in their lives where even starting small could make a big difference later.
With modern tech-assisted, low-fee advice, the equation has flipped: studies show people would be better off long-term not managing their own portfolio. The trick now is in getting younger adults to realize investing isn't a "someday later" or "other people" thing, and older adults to objectively evaluate how well they actually DIY--and the quiet opportunity costs of only doing some of the work.
#financialadvice #investing #advicetechnology #roboadvice #personalfinance #advice #portfoliomanagement #DIYinvesting
