There has been a lot in the news lately about the growing technology platforms, referred to as Robo Advisors. This Year’s volatility will likely put extreme pressure on these platforms given the fact that an algorithm can’t console a panicked client during a downturn, but this article’s focus will be on the softer side of money. From my perspective, there is actually a lot to like about these platforms. They have slick algorithms built to help manage your portfolio and even the ability to create some portfolio tax efficiency. For folks that are looking for an inexpensive way to outsource some portion of their portfolio or portfolio decisions to a passive and tax efficient portfolio, there is some merit to these platforms. That being said, some of these platforms are being billed as an all-out replacement to human advice, and that’s where I believe the mistake lies. A human relationship can help in a much deeper and richer way. Not only can they customize tax strategy, portfolio, Social Security and estate planning strategies for you specifically, but they can help you with the things in life that matter more than money. Here are eight questions you can’t ask your Robo Advisor:
• “Hey, Robo, my wife and I are arguing about money and spending, how do we get on the same page and where do we start?”
• “Hey, Robo, I’m worried my kids are going to be entitled and I want to give them the opportunities and experiences I never had growing up, but how do I do that as well as guide them to work hard and have an appropriate relationship with money?”
• “Hey, Robo, I know I said I wanted to retire at 65, but my company is changing and I find I’ve lost my passion for my work...what options do I have if I want to retire early or transition to a different career?”
• “Hey, Robo, I want to start being more charitable and start giving to my church. How should I balance how much to save, how much to give, and how much to spend?”
• “Hey, Robo, I have a family member asking to borrow money from me; how should I approach this decision?”
• “Hey, Robo, we love our current house, but we think we found our dream house. It is right on the edge of what you suggested we should spend. What implications does this have on our plan and how do we know if we are doing it for the right reason?”
• “Hey, Robo, I’m about to sell my company and it could mean I have more wealth than I’ve ever had before. How do I prioritize and make sure I keep perspective on what’s important?”
• “Hey Robo, I want my life to have counted for something; how best do I use my time left and my resources to make a difference?”
At Beshear Financial we believe having a great life is more important than having a great portfolio!
Joseph B Beshear uses Beshear Financial as a marketing name for doing business as representatives of Northwestern Mutual. Beshear Financial is not a registered investment adviser, broker-dealer, insurance agency or federal savings bank. Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company, Milwaukee, WI (NM) and its subsidiaries. Joseph B Beshear is a District Agent of NM.