Why should I choose Wealthfront instead of Betterment?
Robos stir up the financial industry
But what if an investor had his feelings under control and was actually well informed? Even then, digital money managers can still do him a valuable service. At least if he chooses the right robo. Someone who doesn't just put together an ETF portfolio and resets the weights to the initial value at fixed intervals regardless of the market situation (rebalancing). But someone who is professional
Risk management offers, which evaluates the huge amount of market data in a targeted manner and controls the risk of the financial investment by means of meaningful simulations. Hardly any investor is able to do this.
The second criticism remains: Robos would not advise. Investors need a financial professional whom they trust, who will respond to them and support them in stormy phases on the stock market. But here, too, there is a huge problem. In a 2016 survey by the Edelman agency, only 32 percent of German citizens consider established financial service providers to be trustworthy. This means that the money professionals have the worst image of all the industries examined. That is not surprising. Most financial advisors act as salespeople. They force the customer on high-commission financial products that they don't even need.
The computer takes command
The counselors are not psychologists either. They do not sensitively elicit their risk tolerance from the investor. In reality, they only have a handful of risk templates to squeeze customers into - done. There can also be no question of calming the investor with soothing words as soon as he panics and wants to sell his shares. With the usual investment sums, the effort would be far too great. Only a few wealthy investors can benefit from the individual advice Tilmes and Spang have in mind. It should also be remembered that good asset management should not require constant psychological support. The professionals promise to avoid painful losses.
The need for digital money management is undoubtedly there. In the USA, three quarters of bank customers want “advice” from the Robo. Not all robos will live up to expectations. But the good providers will prevail and create real added value.
On the chessboard, in the cockpit and in the operating theater, robots are already superior to humans. In a few years he will also take command of the car. There is no reason why he should fail in the financial industry of all places.
The article was published as a guest contribution in € uro on Sunday issue 38/16.
Image: Alice Achterhof / Unsplash.com
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