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Do You Need a Robo-Advisor or a Human Financial Advisor?

Society moves at a breakneck pace these days. Smartphones have given people access to virtually any information they want regardless of their location or time of day. With financial planning needs changing in seconds and people wanting information instantly, robo-advisors are being implemented more and more.

Which type of advisor is right for you?

A financial advisor’s role is to help you live the life you choose, whether that involves a big family with lots of college tuition down the line, early retirement, property investment, world travel, or more. Robo-advisors put your portfolio at your fingertips, giving you a snapshot of your investments in an instant.

A robo-advisor puts control of your future in your hands more than ever before. With the ability to make changes to your plan, you can make your money work for you using a robo-advisor. However, just because you can make swift changes to your strategy doesn’t mean you should, and which is where a human advisor comes in.

It Depends On Your Stage in Life

Much of the human advisor versus robo-advisor decision depends on your stage in life. If you’re just starting out as an earner and have only a small amount of investment capital, a robo-advisor, with its lower fees and more hands-on approach, could very well be the best option for you.

Young or first time investors are typically used to the technological savvy required to manage their own investment strategy, so a robo-advisor may feel more comfortable. Using a robo-advisor provided by an investment firm allows for a DIY approach with the safety net of a human advisor should questions arise. An initial meeting with a human advisor can help them understand the full impact of their investments through both the immediate and long-term future. The lower fees and transparent pricing of a robo-advisor may also be attractive for a group without a lot of assets (or rapidly building assets). As time goes on, the robo-advisor becomes an essential tool, giving them more flexibility to drive their portfolio themselves and make adjustments on the spot.

Another group to benefit from a robo-advisor are the savers, looking to build their portfolio for the golden years. This group is generally climbing the corporate ladder and balancing college tuition for their children. Because needs can rapidly change at this level of investment, there are sometimes questions better answered by a human advisor. A robo-advisor may give more control over the investment options, but a human advisor can answer questions pertaining to more dynamic investment considerations. Talking about money isn’t just about money, and a human advisor can tailor a plan that answers unquantifiable questions like how do I plan for an adventure trip of a lifetime or purchase the mountain cabin where I want to live out my retirement years?

“While a robo-advisor alone puts more control in the clients’ hands, there are still situations where a human advisor is a better voice in your corner, with their expertise and ability to think dynamically to plan your strategy. ”

While a robo-advisor can give easy access to the state of their investments, those who are high earners but not rich yet should have a human advisor who can answer questions revolving around taxes and alternate income streams. A robo-advisor is helpful for quick changes and immediate control over the portfolio, but for someone with quite a lot of investment capital, a strategic plan with a human advisor’s expertise can be more beneficial, keeping the robo-advisor as a single tool in an arsenal of tools to best manage the portfolio.

Those at the pre-retiree/post-retiree point in life are less likely to benefit from a robo-advisor over a human one. Plans that have been years (or even decades) in the making benefit from the human touch to ensure everything’s on track. Life can surprise us, and if that happens after retirement, a human expert can produce a creative solution to minimize any setbacks where a robo-advisor can only inform of the setback’s consequences. Keeping the road smooth through retirement years takes investment savvy and creativity that perhaps cannot be duplicated by a computer.

For those who’ve come into an inheritance, are named in a trust, or have gained a windfall through other circumstances will benefit most from a human advisor who is experienced with planning and executing an investment strategy around these specific life events. Such advice can cover questions around taxes, disbursements quantity and frequency, and can mean the savings of thousands of dollars in penalties if not properly handled.

A human advisor can offer advice on this and much more, as well as recommend investments that fit the clients’ social consciousness. While a robo-advisor alone puts more control in the clients’ hands, there are still situations where a human advisor is a better voice in your corner, with their expertise and ability to think dynamically to plan your strategy. A robo-advisor opens many doors to the understanding and control over one’s investments. Be sure to research carefully which option most fits your needs. Perhaps the answer for you lies with a combination of human expertise and the flexibility and control with a robo-advisor that gives the most value and peace of mind for a future lived the way you choose.


Set up a consultation with us to discuss your sustainable investment options.

Three Investment Strategies To Tackle Climate Change

We’re proud to be featured in a new article at U.S. News and World Report, “Three Investment Strategies to Tackle Climate Change.”

EXCERPT:

In a post-election climate where much of an incoming White House administration is filled with anti-climate change proponents, some investors are trying to take a public stance.

Peter Krull, president of Krull & Co., a socially and environmentally responsible investment firm in Asheville, North Carolina, says he’s seen a surge in investors who are interested in investing in more sustainable companies since the election in November.

READ THE FULL ARTICLE HERE.

Seven Ways to Invest With a Theme In Mind

Over at U.S. News and World Report, Krull & Company’s Peter Krull joins several thought leaders in discussing how millennials are adapting the trend of “thematic investing.”

Forget the investing style of your parents and grandparents. As times have changed, so have attitudes. Thematic investing is trending upward as more millennials and everyday investors look to change up their portfolio.

Read the full article here.

Excerpt:

Use what Krull calls the “what’s the next economy?” philosophy. Ask yourself what the economy will look like a decade from now.

Consider what companies may be providing energy and consumer goods. Look for companies that are doing innovative research and development that are open to trying new things.

“Companies that aren’t afraid to make educated risks on new products and services have every chance,” he says.

Read the Full Article at U.S. News & World Report >>

One Week Later…

It looked like the sky was falling. On Friday the 24th, European markets dropped nearly 11 percent*. That same day, the S&P 500 dropped about 3.6 percent*. And the following Monday the 27th, it was more of the same.

But here we sit a week later, and we’ve seen a stabilization in the markets, and four straight days of positive returns. And as of mid-day today, we’re up again.

Our portfolios rode out this volatility very well. We did not make any changes because none were necessary. Our disciplined, diversified investment strategy is designed to cushion volatility. We will continue to keep an eye out for opportunities that might arise, but for now, we’re happy to maintain course.

The New York Times had a good article this morning using the Whac-A-Mole game as an analogy for financial management and trying to trade and beat the market. It’s worth a read.

Finally, the Krull & Company team would like to wish everyone a happy and safe 4th of July Holiday weekend!

*as measured by iShares Europe ETF, IEV; S&P 500 ETF, SPY

So You’ve (Unexpectedly) Inherited Some Money…What Next?

It can feel like a rollercoaster when you unexpectedly receive news of an inheritance. It could be completely out of the blue, or it could include a larger or smaller sum than you thought might be available. Here are five steps to navigate your new financial situation, and how to best handle it when others may be involved.

Step 1: Acknowledge that there are emotions attached to this money.

Many inheritors skip this first step. You could be be feeling excitement, sadness, anger, jubilance, or anxiety. No matter what you are feeling–and how often it changes over the coming weeks and months–it is important to appreciate that these feelings are natural and appropriate.

Step 2: Appreciate that nothing needs to happen fast.

Resist the urge or impulse to make a big purchase or change your lifestyle until you have thought through all the implications of each choice. Also, resist the pressure when others ask you to loan or give them money. By approaching this as a process and consider all options before using any of the money, you will be happier when confirming a loan or gift will be an appropriate use of funds down the road.

I recommend at least a three-month timeline for this process to consider ideas. This time period allows you to balance your emotions about honoring the person who provided the inheritance, and letting go of the past so you can plan for your future.

Step 3: Set up a strategy for reviewing options with a group of trusted advisors.

Ideally, these will be people without an agenda for the money.

Spend a little time dreaming about saying YES to YOU! How do you want to use the money for short-term and long-term outcomes?

For some people, the dream could be starting a business, paying off a loan that causes you anxiety, taking a big trip, buying a house or making charitable donations—all of these are noble thoughts and deserve full exploration of the pros and cons.

Get input from this group (colleagues, friends, family, advisors) to help you articulate these dreams and how they connect to who you are and your future. This group can also be your accountability checkpoint when you have an impulse to spend the money. Sometimes a counselor or coach is helpful to process these ideas and the associated emotions. Ultimately, you can come up with a plan with categories for the money , for example:

  • 5-10% for a splurge (BIG YES TO YOU!)
  • 50% investing for the future (you and your family legacy)
  • 40-45% for your dreams that you have created and discussed with your advisors (starting a business/gifts/loan payoffs/charities etc)

Along the way, stay curious about the process and your reactions.

Step 4: Recognize that this is a great opportunity to take a look at your inherited beliefs about money.

Decide if what worked (or didn’t work) in the past is really a match for the person you are today.

“Our past is a story existing only in our minds. Look, analyze, understand, and forgive. Then, as quickly as possible, chuck it.”—–Marianne Williamson

I recommend reading The Emotion Behind Money, Building Wealth from the Inside Out by Julie Murphy Casserly, CFP. This book can be helpful as you navigate these financial choices.

Step 5: If you choose to invest some of the money, look at it through fresh eyes.

Was it invested using a 1980s model with companies that do not behave in ways that match your values? If it was inherited from an elderly relative, perhaps it was invested in a risk averse manner that matched them.

However, you are younger and more interested in building a solid nest egg for the future, and you may be willing to take more risk to hopefully generate higher returns. If you resonate with the triple bottom line philosophy, specifically seek out companies that fulfill these characteristics (they make a profit and make a difference in the world). This investment strategy leaves a legacy for future generations that clearly states what you believe in and value.

Rejoice that you have been given this opportunity to responsibly navigate this inheritance.


Have questions about an inheritance or need a consultation for your investment strategy? Contact us.

Women Are Leading More Investment Strategies…Here’s Why

“Money is something we choose to trade our life energy for. Our life energy is our allotment of time here on earth, the hours of precious life available to us….it is limited and irretrievable…our choices about how we use it express the meaning and purpose of our time here on earth.”

—Joe Dominguez and Vicki Robin, Your Money or Your Life

Contrary to the popular belief, money isn’t a man’s game. More and more women are now making the financial decisions for their family, including investment strategy.

According to the Family Wealth Advisors Council:

  • In four of 10 American families, the woman is the breadwinner.
  • Nearly 95% of women will be their family’s primary decision maker at some point in their lives.
  • Women account for more than 40% of all Americans with gross investable assets of more than $600,000 and 48% of the country’s millionaires.
  • An estimated $25 trillion will accrue to women through 2030 via generational and spousal transfers. (By then, at least two-thirds of the nation’s wealth will be in women’s hands.)

Generally speaking, women put energy into the areas they care deeply about.

How they behave with money is a gauge that reflects these values.

Just as women are carefully reading food labels and altering household purchases to keep their families healthy, they are also thinking about the entire path and impact of each and every dollar they spend…especially when it comes to moving larger amounts of their money around.

What kind of company or service do they want to support (or avoid) to reflect their value systems?

The moment they go with either-or is the moment that choice reflects them as an individual, a partner, wife, mother, employee or employer. Many women are curious about the overall behavior of the corporate entity that make specific products, and will actively complete research or seek out companies that exhibit the values and attributes that match their view of the world. These attributes may include treating employees and suppliers honorably, giving back to the local community, and using only their fair share of environmental resources.

Women are currently leading a sweeping divestment-reinvestment shift in finance.

They are choosing to invest in and support companies that hold a triple bottom line philosophy. This means a company not only pays attention to making a profit, it is also socially and environmentally responsible.

The sheer volume of dollars women are making decisions about will shape the future of the investment markets.

This act of consciously investing will affect both sides of the gender coin–it already has in certain governments, institutions, endowments, and financial groups.

Whether you’re a man or a woman, do a check-in with your financial and investment decisions, and see if you’re making choices that reflect your values.


To schedule an appointment with Leesa Sluder, contact us.