How Robo Advisors Can Make a Real Difference in Your Financial Planning

With advent of new technologies, we began believing in immediacy. From pizza to direct mail, we want everything with the speed of light and accuracy of machines. While washing machines have replaced traditional ‘dhobi ghats’ and Google maps have shunned the need to ask directions, finance related advice is being provided by robots now.


Robo Advisors

Robo advisors is a digitally automated online finance advisor that provides investment management upon exhaustive interaction with the user. It provides money management services upon generating your portfolio through formulas and algorithms using your age. The robo calculates the risk you can take and assesses how and what to invest your money in. It is not for you if you are a talker and enjoy human interaction like I do.

It starts with an investor questionnaire that feeds into algorithms and pre programmed software (stuff I find really exciting !!) to create your investor portfolio. So, your routine funding gets allocated as per your portfolio. Robo Advisor giants like WealthFront, Bodhik and Betterment provide services like adding, withdrawing and making periodic allocation of changes to the funds. They are passive, yet fast and ensure low-cost advisory services, a perfect choice for short term, small investments.

As I mentioned, these involve little to no human interaction so you’re at bad luck for being a chatterbox or a non-knower. If you wish to get your queries clarified, well, you just cannot unless your robo advisor is good enough to have a back office sourcing customer care for you. Most of the robo advisor companies have an exhaustive backend customer care team that can help you with the output of the algorithm.

Real advisors

Well, to define them, any finance advisor with two legs and arms, a head on top of his torso and a voice is a real, traditional advisor. This guy understands, informs and comforts you better. He is trained in the field and his experiences are based on real life encounters with finance situations that might be knocking your door any moment.

He starts by learning about you, your life story, spending behaviour, life goals and objectives. It is through a real time assessment of your lifestyle and finances that he formulates your portfolio which he later reviews for hidden risk factors. He steers you in the right direction and not just the one that makes him more money. An ideal advisor recognizes your needs and desires and comforts you in panicky financial situations.

More than often, robos are easily and timely updated with changing market patterns while the human advisors take time to absorb it all in. And so, humans being their creator and exploiter have begun using robos to serve the clients with smaller accounts to manage.

Now, to judge which of the two is better, act smart:





Robo Advisors


Formulates your portfolio through the questionnaire you submit and allocates your timely funding according to it.

You yourself will have to make changes when needed through a follow up questionnaire.

Traditional Advisors


Prepares your portfolio based on initial interaction keeping in mind your lifestyle, goals, orientation and finances.

Makes necessary changes when needed.

Duly informs you of the risk factors.




















Offers least to limited human interaction in the initial process. One to one interaction varies from company to company.


Can Exaustively analyze and suggest you portfolio with a deep dataset


Robo advisors are bound to provide passive investment through passive management in order to minimize the expenses.


Robo advisors are basically network based services and hence they offer low-cost advisory services. It is due to automation, low human interaction and their transparent and straightforward approach that they can afford to provide their services at low market costs.


It is based on ‘set and forget’ way of action.




It collects information, formulates a plan to finance your future based on ‘numbers’ and figures.


You’d be eligible to unlimited one-to-one interaction over the phone, Email or Skype. Routine meetings for in-person interaction are also scheduled.


Human advisors provide planning, investment and insurance services.


They provide passive management, active management or a blend of both as per your needs. This would come with a lot of cost indeed.


These services include a human who studies, examines and manages your finances. His services include travelling costs, mobile billings, etc. Most of the times, they are themselves unclear of what they’ll charge you. Hence, it is usually expensive.

They’re humans, like you so they try their best to translate your dreams of a summer home or foreign education into a money figure.



They can motivate you in right direction and comfort you when things go wrong ofcourse if they are reactive enough.

Still confused as to which one is better? Spoon feeding has gotten you pretty slow there. So, for the benevolent, helping creature that I am, I’ve made these tiny conclusions to help you choose better:

You may use a Robo Advisor if:

  • you’re investing a small amount of money.
  • like/love working digitally.
  • can afford to ‘set and forget’ your hard earned money into investment. Well, I dont mind .. :)

So I’ve the other option of using a traditional advisor that:

  • guides me into investing a larger amount of money.
  • includes me into the investment process of ‘my’ money.
  • escorts me through each step of financing like a friend.

About Dream Peddler

The author finds too many similarities with himself and the boy Calvin. Although a cold blooded techie, working with an Indian software MNC, the finer things of love and life fascinates him. Major portions of his work are about the things that inspires and pacifies. Politics and society too get a chance.

Leave a Reply