03 May 2021

Good leaders never stop learning—to lead others effectively, you must learn to lead yourself first. If you want to grow your company, then you need to acquire and study information from experience or teachings constantly. As such, you will need to seek advice from business coaches, lawyers, tech consultants, and many other industry professionals to keep expanding your knowledge.

As a business owner, you need to ensure that you’re knowledgeable enough to make well-informed decisions that get results. You may have the final say, but you shouldn’t do it alone! Remember that it’s also essential to consider viewpoints from someone with more expertise than you.

Money and Decisions

Money is vital for any business. Finances may not have been the motivating factor when you launched your organisation, but it still has an essential part to play. Without it, where do you think you’d be? You certainly wouldn’t be the leader of your own company, would you?

As a leader, you must guarantee that your finances and investments are being managed well to grow your business. Money can be challenging to manage, especially when there’s a lot of it—which is why it’s important to work with a financial advisor to make the most of your investment and lead your business to profitability. With the right financial advisor, you can change the course of your company for the better.

Although seeking insights from others isn’t expected to become obsolete in the coming years, there is a significant change coming concerning who—or what—you receive financial advice from.

The What

Financial advisors are essential to making the right choices related to your businesses’ finances—this part remains true. But thanks to bright minds and the latest technology, you may no longer need the help of a human when it comes to these matters. Instead of the usual person dressed in a suit and tie, you may request guidance from a digital medium!

The robo advisor is a digital platform that provides financial planning services driven by algorithms. Some robo advisors are entirely automated, which can work on their own, but others offer access to human assistance too. A robo advisor will collect information from their client and use that data to handle the construction and maintenance of an investment portfolio.

The Pros and Cons

Is it time for your business to rely on robo advisors? Take a look at our list so that you can weigh the pros and cons:

The Upside

Low-Cost Portfolios

Don’t worry about their services’ expenses because many companies only charge between 0.25% and 0.50% for the annual management fee. There are even free options, such as Sofi Automated investing. Most robo advisors construct their portfolios with low-cost, index-based Exchange Traded Fund (ETF).

Easy to Use

Investing has never been this easy! Technology has made many tasks much faster and more accessible, and this is no exception. All you have to do is open an account, answer some questions about your goals and risk tolerance, and a robo advisor does the rest. This allows you to focus your attention on other matters, such as making contributions and running your business.

Reduced Risks

Robo advisors operate on diversification. Instead of betting everything on one stock, they spread your investments around, balancing risk and reward in your portfolio. By diversifying, robo advisors manage to lower your portfolio’s risk and help you get stable returns.

The Downside

Limited Flexibility and Personalization

Robo advisors aren’t fully personalised yet. Unlike human financial advisors who can reassure you when you panic, a robo advisor won’t talk you off the ledge. You also won’t be able to have a broader investment portfolio with a robo advisor.

No Human Interaction

Some people want to form relationships with their investors. Unfortunately, that’s not possible with robo advisors; they don’t have an office where you can meet and talk. Although they do offer varying degrees of customer service, online chat won’t compare to an actual human conversation.

Conclusion

Robo advisors aren’t perfect—they have their advantages, but they also have their limitations. But, they are just getting started; these investment platforms continue to evolve to maybe someday meet the needs of every investor. If you’re still unsure whether to invest in robo advisors, seek advice from IT consulting services.

Are you having trouble managing your business processes and making tech-related decisions? The Enterprise Solutions Team at Informatics can help you! Our insurance software solutions and high-quality services enable our customers to manage their business processes, budgets, and risks seamlessly. Get in touch with us today to find out more!

 

Written by Daniele Paoletti