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Is Financial Planning Software a better option to Robo-advice?
New careers and new promotions often start at the beginning of the new year. It is time to reflect on how you can put that extra money towards building wealth for your future. Robo-advice is one option, the second is to use financial planning software.
Robo-advisors are online wealth management services. These software platforms help you select suitable investments. Each person has a different risk profile and investment preference. By asking a few simple questions, the software will recommend suitable products.
The aim is to provide low-cost financial advice. The revenue for robo-advisors comes from the commission of product sales.
When Robo-advisors first came onto the scene they were independent of financial institutions. But, financial advisory groups are developing their own hybrid models of robo-advisors. The information provided may encourage you to seek further professional advice from a financial planner. Some people don’t have enough income or accumulated wealth to warrant these services now.
The Pros and Cons of Robo-Advice
Investopedia has researched the pros and cons of robo-advice.
The Cons: What’s Wrong with Robo-advisors?
- They aren’t personalized.
- They falsely bash advisors’ price schedules.
- Falsely claim there’s no place for the little ‘Guy or Gal’.
- No face to face meetings.
The Pros: What’s to like about Robo-advisors?
- Low fees.
- Nobel prize-winning algorithms.
- Access to robo-advisor services through a financial advisor.
- Expanding market for financial advice.
- Robo-advisors aren’t ‘one size fits all’.
- Low minimum balances
The alternative to Robo-advice is Financial Planning Software
Financial Mappers is financial planning software which fills the gap for those who want to manage their finances. It is suitable for both the person getting started and those with a comprehensive set of assets and loans.
The interactive calculator in the Financial Mappers software allows independent evaluation. You can include all aspects of your finances. The aim is to map out a plan for up to 30-years. From this plan, Financial Mappers will generate a set of 15 different reports about your plan. These include:
- Check Your Plan Outcomes
- Debt Management Report
- Wealth Guidance Report
- Insurance Needs Evaluation
- Superannuation Report
A Robo-advice platform will recommend a set of financial products. Financial Mappers will generate a report on your plan. The difference is the report takes into consideration all aspects of your finances.
Financial Mappers does not give financial advice. It does not recommend or sell any financial products. It calculates the likely outcomes of your future financial plans.
The use of extensive modelling tools, allow you to create many “what if” scenarios. You can back-test your our investment plan against historical data.
At the end of the day, you may still want to invest in a managed fund. There are plenty of financial products available. You can choose the ones you think will best suit your specific needs as found in your Investment Plan.
If there comes a time when you need specific advice from a financial advisor, ask the advisor if they use Financial Mappers Pro. This allows you and your planner to share plans.
Want to know more about how Financial Mappers can help you?
Disclaimer: Financial Mappers does not have an Australian Financial Services License, does not offer financial planning advice and does not recommend financial products.