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Technology has ingrained itself in nearly all aspects of our lives. We have our entire lives loaded into the phones in our pockets and spend more time looking at screens every day that we would probably like to admit.

A growing number of people are now turning to technology to help with their investments as well. Today, we go through the way using a robo advisor can help, or hurt, your retirement savings plan.

Yea for Those Just Starting Out

Robo advisors, or online, robotic financial planning services, are a great starting place for people who are just getting started with investing. Generally, these programs can help you project how much you need to save as well as giving you guidance on how much you should save each month to meet that goal. As someone new to the world of investing, meeting with an advisor can be intimidating off the bat, which makes these online options a great starting point for investors looking to get their feet wet.

If you’re new to investing and have a long time until you plan to retire, these options may be the one for you. Because they don’t have very much in the way of retirement income planning, these online financial planning platforms are especially helpful for investors with a long time horizon before they need to spend their investments. 

Nay for Complex Situations

More seasoned investors, on the other hand, may need a wider range of options to properly manage their accounts. If you’re looking for a customized investment strategy or want to have a more granular level of control over your accounts, a robo-advisor may not be the best option for you.

Robo-advisors aren’t always able to handle the more complex situations because they may not take things like taxes, estate planning needs or specialized investment needs into account. This means that investors who are nearing the ends of your careers may not see as much benefit from an on-screen rather than in person financial advisor.

Yea for Organization and Tracking

For someone who has a more simple investment strategy, but who might struggle with keeping up with their progress or who has a hard time with consistently saving towards those investments, robo-advisors could be a cost effective answer.

Many of the robo-advisors out there have their own apps, meaning you can check in on your account balances, see your rate or return and adjust your investment options anywhere with internet service. Depending on your goals and lifestyle, the convenience of a robo-advisor may be the best option for you.

Nay for Lack of Personal Relationship and Guidance

One of the biggest things you miss when you engage a robo-advisor as opposed to a physical human being is the personal relationship and guidance. When you see the market drop 10 percent in the course of a few days or when you have major lifestyle changes, like changing jobs or adding a new grandchild to your family, you may want a live person to talk to about how you should react.

As financial advisors, it’s our job to work proactively to give you the best options out there so you can be confident in your financial future. If this is something you value, it may mean you’d be better off with a human financial advisor.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This article was originally published on March 3, 2019 in the Brainerd Dispatch.