Financial Planning with Robo Advisory- does it make sense?

1. 03/11/17, 4)58 PMFinancial Planning with Robo Advisory- does it make sense? | LinkedIn
Page 1 of 4https://www.linkedin.com/pulse/wealth-robo-advisory-does-make-sense-vaibhav-ajay-mishra/
Financial Planning with Robo Advisory-
does it make sense?
Published on September 22, 2017 |
Vaibhav Ajay Mishra
Co-founder| FinTech| Retail Banking| Business & Revenue Gr…
5 articles
114 9 2 1
Financial planning is important. In a inflationary economy such as ours and with
continuous changes to the tax structure it becomes even more so. Quite simply it is the
critical starting point of any meaningful wealth management strategy.
So what is financial planning? Well the first thing is not to think of it as a one off event.
It is on going – a process of setting goals, evaluating where you stand against them, and
then reviewing your progress towards them.
What do we mean by goals? Well it’s more than just money. It’s planning the children’s
futures. Making sure retirement is going to be the idyll you dream of. And, if things go
horribly wrong, making sure your family are protected from the consequences.
So what is it for you look for? Quite simply its peace of mind. That sense of calmness
and confidence that comes from knowing you are in control.
You’re sure of two things – you want to protect the wealth you have, and you want it to
grow. But there is a world’s difference between knowing it and achieving it. Achieving
it means ensuring that your wealth is working as hard for you as you are for it. And
whilst you are hard at work, it is being protected at all times. You know that you need
guidance. And you know that you need to start today. But you have to be able trust the
advice you get. You need somebody who will take the time to understand you, not just
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your wealth. And they must be independent and fair, with your best interests at heart.
It may be about the good things in life – planning for your children’s education, an
unexpected windfall, a dream retirement or helping others. It may be to shield you from
some of the less good things – a tax bill, a sudden illness or loss of job or loss in
business. It certainly means that wherever possible, you want to avoid wealth-related
surprises. Your strategy may be simply to protect your wealth or it may be to grow it.
Technology is all set to change the world of Financial Planning too in form of Robo
Advisory as its already doing to many other professions. Robo Advisory are preferred
models because of their unbiased approach. These are automated investment platforms
that handle the construction and rebalancing/ maintenance of an investment portfolio.
Concept is similar to the idea behind target-date retirement funds and other all-in-one
funds. In both cases, the goal is to provide you one-stop-shopping for your entire
investment portfolio.
Benefits with Robo Advisor:
1. High-Quality, Low-Cost Portfolios;
2. Ease of Use & Always available;
3. Hands Off Investing;
4. Regular Rebalancing;
5. Low Minimum Initial Investment Requirements;
6. Unbiased Advice, No Mis-selling & Less conflicts of interest;
7. Multitude of services;
On the whole, I think that robo advisors are a fantastic option. They offer high-quality,
evidence-based investment portfolios at a low cost, making it easy for you to invest well
no matter where you’re starting from.
It’s important to recognize that they are simply investment management tools, not
comprehensive financial planners. They don’t ensure your success and they might not
help you navigate the complexity of your entire financial situation.
One of the most valuable benefits may not be obvious at first. Robo Advisors can save
investors from making serious mistakes. For some people, saving money isn’t a
problem. Instead, they struggle to decide what to do with their investments. Some
people trade too frequently, trying to time the market, or otherwise reacting to changes.
This can cause people to make one of the worst investing sins possible – buying high

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and selling low. Other people make the mistake of waiting to get into the market,
instead playing things too conservatively. Perhaps they sit on too much cash, or they fail
to rebalance their portfolio because they fear they may make a mistake. They rebalance
at set intervals, based on your predetermined risk tolerance. They stick to the plan. And
in the long run, this can save many investors from making costly mistakes. But if you’re
purely looking for a simple way to implement a high-quality investment portfolio, robo
advisors are a good choice. Robo advisors can be the perfect investment alternative for
people who are not interested in do-it-yourself investing.
Robo advisors have stimulated more demand for artificial intelligence in the hopes that
AI software will help personalize financial choices better. Due to their overall value
proposition, robo advisors have grown very quickly.
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2 Comments
1moMayur Gandhi, MBA
Leader | Problem Solver | Manager
Like Reply 1 Reply
Is providing financial advice regulated in India, Vaibhav?
1moVaibhav Ajay Mishra
Co-founder| FinTech| Retail Banking| Business & Revenue Growth| Sales, Marketing, Complian…
Like Reply
Partially!
1moNarendra Kumar, CA,CS ,CPA
Policy Advisor for South East Asia at IMF & Director at Enterslice
Like Reply
Nice article
Add a comment…
Vaibhav Ajay Mishra
Co-founder| FinTech| Retail Banking| Business & Revenue Growth| Sales, Marketing, Compliance & Operations| Wealth mgmt| Working Capital| Brand Building|
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