Consumer Reports: Should You Make Switch To Robo-Adviser?

PITTSBURGH (KDKA) – In this era of self-driving cars, what decisions are you comfortable entrusting to a computer? How about financial advice?

New digital platforms can manage your portfolio for less than a human financial adviser. Consumer Reports recently examined whether it’s time to make the switch to a robo-adviser.

Robo-advisers manage an estimated $53 billion, and that number is expected to grow to between $5-7 trillion in the next ten years. Some of the players include companies like Wealthfront and Betterment. The asset-management giant Schwab is also getting into the game.

But, experts at Consumer Reports say going robo requires a fair amount of faith in the technology, especially in a rocky market. There’s no real track record. Robo services haven’t been around that long and haven’t been tested in a true bear market.

Plus robos don’t account for the human element of advising. A robo-adviser can’t help you prioritize financial goals: Should you pay down debt or save more? Nor can it help you navigate tricky financial situations like divorce, saving for college, or handling the finances of an aging parent.

Deciding between a costlier human adviser and a cheaper computer solution depends on a variety of factors, including your financial circumstances, your tolerance for risk, and your comfort level with recently developed technology.

Consumer Reports has put together a quiz to help you figure out what kind of adviser might suit you best.

Complete Ratings and recommendations on all kinds of products, including appliances, cars & trucks, and electronic gear, are available on Consumer Reports’ website. Subscribe to ConsumerReports.org.

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