In this article, we take a look at robo-advisors and discuss some of the pros and cons of letting an AI choose your investments.
Technology has revolutionised everything, from navigating your way through a foreign city to paying for your groceries without a wallet, but is it really safe to trust a robot with your finances? And which online provider offers the best solution for you?
What is a Robo-advisor?
Robo-advisors are online wealth management tools that offer automated mathematical models and algorithm-based financial advice with no human interaction. They work by using questionnaire inputs (like your age, income, risk tolerance, and financial goals) to choose investments for you and automatically grow your funds over time.
Through a web-based interface, you get access to asset allocation suggestions based on modern portfolio theory and software that uses algorithms to administer your investments.
Who are Robo-advisors for?
Robo-advisors are increasing in popularity among young investors who feel more comfortable doing things online, and new investors with a small pool of cash to invest. Most robo-advisors typically cost less than meeting with a traditional financial advisor and have a much lower minimum starting balance. As a result, they are accessible to everyone, not just the wealthy.
Is there a downside?
While Robo-advisors cost less and allow you to manage your funds from anywhere in the world, they also come with many downfalls. For example, most robo-advisors don’t provide additional services like retirement advice, estate planning, cash-flow management, budgeting help, insurance advice, and tax strategies. They also:
- Lack human empathy and support.
- Cannot answer your questions.
- Aren’t tailored to your unique situation and financial concerns (e.g. fears, priorities, personal needs, etc.).
- Can be hard to understand with no previous financial planning experience or knowledge.
How is Financial Mappers different?
Financial Mappers is a one-of-a-kind dynamic modelling tool that allows you to manage your finances independently. Unlike most Robo Advisors, it’s a platform for understanding your finances so you can make strategic decisions about how you invest your wealth.
In other words, Financial Mappers offers a complete financial mapping system that is personalised with your investment and financial goals, but without the automation. You get the low cost, the budget you want, the advanced online tools, and a whole bunch of other fantastic features. And, you remain in control of your finances.
Financial Mappers puts you in the driver’s seat
For a very low cost, Financial Mappers can equip you with the dynamic modelling tools and advanced calculators that you need to make smart financial decisions.
The platform can help you organise your self-managed super fund, manage your debts, and maintain your income in retirement. It is also tailored to your unique situation and is designed to grow with you on your financial journey. Over time, you can return and refine your plan at any time and in any destination. Financial Mappers is accessible to everyone!
Other additional features that make Financial Mappers better than a general robo-advisor include:
- An interactive calculator that allows you to input particular lifestyle parameters including home loans, debts, investments, property, superannuation, credit cards, and personal living expenses. With Financial Mappers, nothing is overlooked and everything is tailored to your unique situation.
- Advanced modelling tools that allow you to plan for “what if” scenarios and future projections. Your investment can be tested against high and low growth economic scenarios and historical data from any date you choose.
- A personalised financial dashboard that lets you see your financial situation at a glance.
- Comprehensive wealth reports, dynamic calculators, interest rate risk assessments, and interactive, colour coordinated graphs.
Disclaimer: Financial Mappers does not have an Australian Financial Services License, does not offer financial planning advice and does not recommend financial products.