I’ve been seeing robot advisers mentioned a lot in the financial news lately. No less than The Wall Street Journal has predicted that “robo” financial advice services will manage a staggering $5 trillion to $7 trillion within the next ten years, a huge leap from under $100 billion being managed today.
I have to say, such growth would impress but not surprise me.
Three years ago, when we decided to build a radically new service that would make financial planning simple, accessible, and affordable for everyone, we knew that “robotizing” would be part of our solution. Unlike the all-digital services that many people think of when they hear the term “robo adviser,” however, SUM180 is a hybrid offering. What this means is that you do your assessment online, including uploading your data, then you receive your computer-generated SUM180 Plan – but expert financial advisers are there to answer your follow-up questions.
Why is the combination of online + human is a better solution?
There are several reasons why the hybrid of online and human works best for many of us:
1. A combined online/human service is usually more affordable than traditional services. Automating something as complex and nuanced as personal financial planning is far from easy. At SUM180, our team of financial and technology experts have spent over six years developing the proprietary system that generates each member’s Plan. We’re proud to say that the artificial intelligence that generates each SUM180 plan is firmly grounded in The Alliance of Comprehensive Planners™ (formerly the Cambridge System™) approach to financial planning. The advice you receive aligns with what you would receive from an expert financial adviser in person – but for a small fraction of the price.
The most exciting aspect of SUM180 is probably this: finally, we are putting top quality financial planning within reach for everyone, including the people who need it most.
2. For nervous newcomers to financial planning, a hybrid service offers the right balance of privacy and support.
If you need a non-threatening way to approach the complicated task of building financial security, the robo adviser approach provides the opportunity to build a comfort level in private before taking the next step. You can get a comprehensive view of your financial picture, then research topics and questions, and gain a basic understanding of your options before reaching out to others to implement next steps.
3. Money is inherently emotional, so financial planning can never be fully automated. No matter how accurately our automated system assesses your personal data and circumstances, there are always intangibles to consider in deciding what to do next. The best (human) advisers will gather all your information and then explore choices with you. These advisers will tell you that the second level, deeper questions that come up in a face-to-face follow-up discussion will be the most important for identifying lasting insights and setting priorities for a successful path forward.
Entirely online financial services are not able to make this emotional connection with clients. Combining the benefits of online advice with human advice, however, delivers the best of both. Inevitably, as you travel on your financial journey, you will have follow-up questions – and you need to know that you will get answers as part of the service.
4. A hybrid service saves you time (and more money). Not every part of financial planning can be automated, but automation can do a lot to make even the non-automated parts of financial planning process more efficient and convenient. At SUM180, for example, any follow-on consultation with an adviser is fueled by a very comprehensive set of data and analysis generated from your computer-generated Plan. As a result, your “on” time with your adviser is as productive as possible. The adviser is up to speed and able to immediately explore choices, and associated feelings and concerns to support the best possible outcome for each client.
Personally, I believe that 2016 will be the year of the robo adviser! What do you think? Has the time come for automation to make financial planning accessible and affordable for all?