How to Pick the Right Robo Advisor

I gave my thoughts on Robo-Advisors to Joanne Cleaver, writing for U.S. News and World Reports:

“Robo-advisors are to investment advisors what TurboTax is to tax preparers,” says Charles Sizemore, founder of Sizemore Capital Management LLC in Dallas. “If you have a complex situation, TurboTax won’t help you. If you have a complex situation, the more wealth you have, the more tailored an approach you need.” Sizemore taps into some automated services for his own clients and advocates consumers take an a la carte approach, using digital advisors for basic investments, such as index funds, and human advisors for more complex decisions…

How to kick the tires. Robo-advisors are designed to detect your investing goals by asking key questions, but no digital advisor can be as thorough as a thoughtful, experienced human advisory, executives at digital advisories say.

You can glean insights into a service’s approach by going through the goal-setting exercise most services use as an opener, Sizemore says. Any advisory that quickly spits back investment recommendations based primarily on age is probably not credible, he says. “If it starts with age and doesn’t get more nuanced, that’s a terrible way to do things, for lack of more creative options,” he says…

[Regarding customer service issues and the need to speak to a real human,] Sizemore recommends calling just to see how well the service staff responds to your questions. “If you hate calling customer service centers in general, you want to make sure you are satisfied with the robo-advisor’s support before you get very far into the relationship,” he says.

You can read the full article here.

This article first appeared on Sizemore Insights as How to Pick the Right Robo Advisor



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