What Are Online Financial Advisors?
Online financial advisers are an excellent choice for people looking for a convenient and affordable solution to make sure their finances are on track. However, just how good are they (or really even any kind of financial adviser) when it comes to actually generating some beneficial long-term results? The trouble with relying on a “myth” of “expertise” is that there are simply no experts in every field – and financial advisers are no different. Let’s take a look at how online financial advice works.
The first thing that you need to ask yourself when getting financial advice is whether you actually need the advice in the first place. Many people have very high risk tolerance levels and are unlikely to be suitable to take a major risk in a one off scenario. The flip side of this is that some people will see significant increases in returns from investing a small amount of money, but this is usually because they have some real skill in the area. People who have relatively low risk tolerance, but a very high standard of returns, are obviously better off relying on robo-advisors. Of course, if you are just starting out then online financial advisory services are probably fine, so don’t worry too much about this aspect.
If you are already investing and you think that your portfolio is getting the sort of returns you should be getting, then you will have to get a handle on your risk tolerance. This is something that online financial advisors are particularly adept at, and you can ask them what sort of risk level you should be aiming for in order to be successful. The beauty of online advisors is that you can go through their portfolios and see exactly what the results have been. You can also get a feel for what sort of returns, you should be expecting. This should give you a good starting point when it comes to choosing the right fit for you.
In addition, there are many people out there who are looking for ways to reduce their costs. One of the easiest ways to do this is by investing in computer programs. There are many companies out there that offer automated investment software which can help you manage your investments. Again, these are great tools for people who are new to the world of online financial advisors and have not yet developed the skills or experience to be able to invest effectively without these sorts of programs.
Of course, as with all sorts of decisions, there are advantages and disadvantages. When it comes to using a computer program to manage your investments, for example, you can be sure that you will receive good customer service if you need anything.
As for the question of whether or not you can get advice from an online financial advisor, the answer is yes. There are many websites online that allow you to speak to real people about all sorts of financial issues. These companies can also provide you with face-to-face advice. In fact, many of the more established companies now have entire branches that are located solely online. You can meet with a professional right over the internet to get sound advice about everything from how to improve your credit score to how to plan your children’s futures.
As for whether or not these in-person robo-advisors are actually helpful, the answer is a resounding yes. In addition to being able to discuss your own investments in a safe setting with a person who actually knows what he or she is talking about, you also have the advantage of getting sound advice without having to leave your house. In other words, you don’t have to drive an unfamiliar car to get the best financial advice. With many of the online financial services available, you can even sit down and have a one-on-one chat with the advisor, which means that you can ask any questions you like to the person who is helping you out. This means that the information you’re getting is accurate, and the entire experience can be as anonymous as possible.
One of the drawbacks of the robo-advisor model is that it can actually cost you money. If you’ve never considered using an online financial advisor, you may want to look into this option. Instead of being required to set up a whole new system for handling your finances, you’ll only need to do some research on each of the potential online financial advisors in order to decide which ones will work for you. The cost may be slightly higher, but it will ensure that your finances are in good hands, and it will also help you learn more about each different advisor to make sure that he or she is right for you. In addition to cost, though, it’s also important to consider whether or not these types of advisors can actually be trusted to handle your money properly.
Disclaimer: This information is general information only. You should consider the appropriateness of this information with regards to your objectives, financial situation and needs. Past performance does not guarantee future returns.
Chris Carlin is an Authorised Representative (No. 1235031 for financial services and No. 514748 for credit) and Master Your Money Now Pty Ltd ABN 65 627 229 681 is a Corporate Authorised Representative (No. 1265677 for financial services and No. 514747 for credit) of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL and Australian Credit Licence No. 236523
