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The Advisor vs The Algorithm: Deciding between Man or Machine

It’s the rise of the machines. When you walk down the street, everybody is looking at some sort of device, staying connected. You want to have everything right now, right here. We want to get answers immediately, just by clicking the mouse or asking Google. 

Robo Advisors, which have made headlines in recent years, are online investment management sites that manage your investments for you through unique algorithms.

So let’s pit humans: Investment Advisors and Robots head to head to see who you benefit more from when it comes to managing your investments.


The fees for managing your investments are the subject of many discussions and regulators have been trying for years to make fees fully transparent. This is where Robo Advisors have an advantage. Some of these platforms do not require a minimum to invest and the fees are reasonably low. Investment Advisors, on the other hand, sometimes require a minimum portfolio value and you are not sure how much you are paying. But if you have enough assets and work with an Investment Advisor that is fully transparent and has the ability to negotiate his/her fees, you will likely be better off working with a human.

Fees matter, but so too does advice. Investment Advisors can add real value.


Almost everybody has access to e-mail, Skype, cell phone these days so it’s not like you have to physically walk or drive to your Investment Advisor’s office on a regular basis. In fact, working with an Investment Advisor doesn’t even require that most people keep him or her on speed dial — it’s more that they’re there to check in with on regular basis.

Robo Advisors are a viable choice for people who simply aren’t going to take the time to learn about managing their money. It’s a good fit, if you have a personality where you are not open to taking advice and are not interested in any financial planning. You set it and forget it.


Money is never just money. It is your children’s education, your family vacation, the house of your dreams, etc. For that reason, setting and forgetting your investments may not be the most effective way to achieve your goals.

Investment Advisors’ strength lies in their ability to translate your dreams into a dollar figure, and to create a plan to get there. A Robo Advisor takes only the information you give it and formulates a plan based on numbers — and your financial future is rarely focused on just the numbers. Plus, which is better able to motivate you to focus on your goals: an e-mail statement, or a discussion with your Investment Advisor that knows you and your individual situation?


Online platforms are meant to suit a wide range of people, so that’s why portfolios managed by Robo Advisors tend to be heavily invested in conservative products like ETFs. While not particularly volatile, ETFs aren’t known for their staggering returns.

In most cases the money is invested conservatively and will yield higher returns than money not invested at all — so if it comes down to using a Robo Advisor or not investing at all, use the Robo Advisor.

Investment Advisors certainly aren’t guaranteed to outperform their robotic friends, but they have the perspective and context to adjust investments to your needs. An Investment Advisor’s perspective is particularly useful if you have a large portfolio or a complicated financial situation. If you’re investing over $100,000, you probably shouldn’t be doing it with a Robo Advisor.


Use a Robo Advisor if you:

– Want to set and forget your investments using typical mass market retail products
– Feel more comfortable working online than with a human
– Aren’t investing a large amount of money
– Feel that you do not benefit from any financial planning

Use an Investment Advisor if you:

– Can benefit from the advice an experienced professional can provide.
– Want to be involved in your investments and planning
– Are interested in strategic risk-management
– Are investing a large amount of money
– Can benefit by specific advice tailored to your unique situation
– Are looking for tax-efficient customized solutions

You don’t have to use one to the exclusion of the other. Humans and robots usually don’t directly compete for the same clients and as your investment needs change, so might your strategy.

Keep in mind the value of the Human Touch, a simple handshake from someone who knows you and your family and will be there to help in times of need. 

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