Hi I'm Anna Hilberry with National Bank
Financial. It's April 10th 2019. Today I want to talk about Robo advisor versus
Real Human Advisor. A Robo advisor is an online investment account. It's
advertised as fast, quick and easy. It takes 5 minutes to set up an account, you
answer a quick questionnaire. This works together with an algorithm and boom,
you've got an investment account. Investors may ask themselves why should
I pay you miss Investment Advisor more money for
your service and what value are you adding. Let me demonstrate the
difference. Let's assume we have two clients. They're both clients of
robo-advisor. They are both in their 40s, They both have a million dollars in
their investment account and according to the questionnaire they filled out,
they both should have a simple growth portfolio. But let's take a closer look.
Client number one is a high-powered executive, he has a high level of
income and he has a tax problem. He needs someone to work with him to
help mitigate the taxes he owes. In addition, he's going through a divorce. He
needs someone to work with his lawyer and give him some effective
advice on how to split his assets with his ex spouse and how to manage the
ongoing spousal support payments in the future.
In addition, he has a small child
that he has to provide for. How can he work together with his ex spouse in an
effective way to manage their assets in a manner that they can support their
child going to university later on. Let's look at client number two. This is
a couple. They've recently sold a manufacturing company. All of their
assets are inside a corporate account. They also have a tax problem but it's a
tax problem regarding how are their investments managed. In addition, they
have an adult son who is a dependent. They need advice on how to manage and
provide for him now and after they're gone.
And so you see, Robo advisor would
give these clients a blanket approach and say there's a few similarities
between both clients and we'll select a growth portfolio for you, when in fact
the clients experiences, life goals and challenges that they're facing are
incredibly different and they need very different specified advice for
them. So the value of advice that an Investment Advisor can provide to you is
specific advice just for you. And so you have to ask yourself what is the actual
cost and value of ineffective generic advice when it's not really for you, it's
for everybody else.
I'm Anna Hilberry, it pays to be Real.
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