Robo advisors have been heralded as the “future of investing” by their fans. The question is, can a computer algorithm really replace human financial advisors?

What is a Robo Advisor?

A robo advisor is a low-cost, digital platform that uses automated algorithms to provide investment advice. 

  • The robo advisor software analyzes the data the investor provides, such as current financial situation, monetary goals, and investing preferences and then it dispenses calculated investment advice.
  • A robo advisor might be less expensive than a traditional financial advisor – but its low, up-front cost comes with a loss in quality, experience, insightfulness and breadth.

A recent study by LendEDU found out that Millennials, who once believed they would choose robo advisors over human ones, actually chose human financial advisors nearly two-to-one over an automated investment service. Other findings from the LendEDU study show that 52% of Millennials believed a robo advisor would be more likely to make mistakes and nearly 70% thought a human advisor would get a better return on their investments .

3 Top Reasons Why a Human Financial Advisor Provides More Value than a Robo Advisor

#1 Emotional Guidance Matters

Compared to a robo advisor, a human financial advisor can provide emotional guidance.

In person face to face interact​ions facilitate an opportunity for behavioral coaching. High touch guidance, especially during volatile market cycles, can help develop positive budgeting and wealth management habits and usually leads to long term financial relationships, understanding and trust.

#2 Every Investor’s Goals and Financial Dreams Are Unique

Human financial advisors can provide personalized counseling and guidance to help their investors achieve their long-term financial success.

As an automated online platform,

  • a robo advisor would be unable to match this level of personalization.
  • a robo advisor relies solely on computerized algorithms to determine financial asset allocation.

While human financial advisors may use similar financial and investment strategies, they also draw upon on past experiences, across a variety of investors, each with unique financial situations.

​Financial advisors usually have an extended and experienced team as well as additional financial tools to help determine the best investment objectives and solutions for each investor.

#3 Life, Financial Goals, and Priorities Changing

Investment advice is just a small part of a complete financial plan.

The most sophisticated automated online platform may offer automatic portfolio rebalancing and tax-loss harvesting, but a robo advisor doesn’t come close to providing the full range of financial services human financial advisors can.

As investors go through life, their financial priorities and investment goals evolve.

Human financial advisors are able to create nuanced investment strategies taking into account changing life circumstances and can offer comprehensive financial advice that includes

While robo advisor solutions are gaining more capabilities and media attention, the consensus is that they don’t come close to replacing a human financial advisor.

Robo advisors may be useful for beginner investors with limited assets. 

For advanced or intermediate investors, robo advisors lack the full range of investment benefits that would let them serve as true replacements for human financial advisors.

If you think you could benefit from high touch, individualized financial planning and wealth management, please contact us for a complimentary consultation.


Brown, Mike. (2018, Aug. 23) Robo Advisors vs. Financial Advisors – Millennials Still Prefer Real-Life. [Blog post]. Retrieved from https://lendedu.com/blog/robo-advisors-vs-financial-advisors/

Rixse, Chad. (2018, Apr. 25) The 4 advantages of human vs. robo-advisors. [Blog post]. Retrieved from https://www.cnbc.com/2018/04/25/the-4-advantages-of-human-vs-robo-advisors.html

Wohlner, Roger. (2018) Is An Online Financial Advisor Right For You? [Blog post]. Retrieved from https://www.investopedia.com/articles/financial-advisors/121914/online-financial-advisor-right-you.asp

Investopedia. (2018) Robo-Advisor (Robo-Adviser). [Reference] Retrieved from https://www.investopedia.com/terms/r/roboadvisor-roboadviser.asp

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