- “Can you afford a financial advisor?” is one of the first results that comes up from Investopedia
- “Do you REALLY need a financial advisor?” is a headline from local news site Biznews.com
- “Why you don’t need a financial advisor” is an article from Forbes magazine
- “Should your financial advisor be smarter and wiser than you?” – The Financial Samurai blog
It is clear that there is much debate around the role of a financial advisor and when you should consider integrating them into your wealth building plan.
Let’s try and unpack these questions in the context of building a world-class robo-advisory business:
Like most industries, technology has proven to be a major disruptor of traditional business models in the financial services sector.
This has resulted in lower fees, easier access to a broad array of different markets and transparency around pricing and reporting for clients.
If you look at our Pricing, you will see that our smart use of technology means that you are not paying switching fees, up-front advice fees, performance or cancellation fees.
Affordability is no longer an issue and this helps us drive superior investment returns for you.
If you unpack this article – written by a well-known financial advisor– the argument is not really about the need for a financial advisor.
The author is actually making the point that ordinary South Africans now have the ability to use robo-advisor platforms to help them access a variety of markets and the technology is helping them optimize the decision-making process.
At OUTvest, we have gone far beyond “goals-based savings” mechanisms and offer an array of products from a starter Tax Free Savings Account right up to our Fixed OUTcome Endowment product for more sophisticated, tax conscious investors.
If you read the article in question, the author makes the point that ultimately what you want is to be on “autopilot” where you are systematically saving on a regular basis and re-balancing from time-to-time.
The beauty of a robo-advisor like OUTvest is that we have developed sophisticated algorithms based on years of research into financial markets.
We make it easy to select from one of our 5 funds that best fit your risk profile and then put your money to work.
“The main purpose of the stockmarket is to make fools of as many men as possible,” is an oft-repeated quote from US businessman Bernard Baruch and if you have followed financial markets for any period of time, you will easily be able to recount stories of investment professionals who have got it wrong.
While there are areas of financial planning that will require specialist knowledge around topics like life insurance and tax structuring, the simple reality is that most South Africans tend to run out of money towards the middle of the month and a very low percentage have any form of emergency fund…. And this includes financial planners or advisors.
If you were an athlete or a business person, you would want to surround yourself with skilled professionals / advisors and tools that will give you the best foundation for success. However, success in your chosen field will require self-discipline, following the advice that is provided and regular assessments on your process – if you can’t measure it, you can’t manage it.
Building of sustainable long-term wealth is no different.
We are quite literally putting the tools in your hand to start managing and measuring your financial wealth.
If you are asking the question whether you are rich enough to have a financial advisor or not, think about the analogy of playing ten-pin bowling.
When you start out, you see the pins (goals) in the distance and you try and aim for it. If the ball starts out on the wrong trajectory, you will end up missing the strike.
When somebody points out to new bowlers that there are markers on the floor just 1 meter in front of you and these markers serve as a guideline for how to bowl, your whole perspective on the game changes. You are no longer chasing a goal in the distance and hoping to hit the right pin – rather you have a simple formula for delivering the ball down the right path.
Whether you go with an award-winning financial advisor or make use of technology to empower your financial decisions, the question shouldn’t be whether you are rich enough to have a financial advisor.Rather the view should be that your financial position will be enhanced by the use of the right tools and advice to build sustainable long-term wealth.
Are you ready to get started?