One of the biggest questions many people have when it comes to their money and their life is whether a robo-advisor or an in-person financial advisor is right for them.

Each has advantages, but also disadvantages.

There’s no one right answer that’s going to work for everyone in this situation, as with most circumstances involving money, but the following are some criteria and guidelines that can help you determine what’s right for you and your financial needs.

Fees

One of the primary reasons many people opt to work with a robo-advisor as opposed to a traditional financial advisor is because of the costs. A conventional investment advisor or wealth manager may charge fees ranging anywhere from 1% to 3% of the value of the portfolio, while a robo-advisor platform generally charges much less.

In fact, according to Investor Junkie, robo-advisor fees may be as low as 0.15% per year. This can have a significant impact on the overall performance of your portfolio.

Objective, Unbiased Advice

Another benefit of opting for a robo-advisor as opposed to a financial advisor? There is often the fear in the financial services industry that advisors aren’t necessarily operating in the best interest of their clients, but are instead working to make themselves money. Some financial advisors work on a fee-based schedule, and what this means is that they often have ties to certain investment vehicles or products, which they’ll recommend above others to make a commission.

Robo-advisors are going to be able to offer a sense of objectivity, although also important to note is the fact that many financial advisors are independent and fee-only, meaning they are objective and offer unbiased advice.

Complex Situations

While there are advantages to working with a robo-advisor, there are perks of a conventional financial advisor as well. Financial professionals must usually undergo rigorous training and interview processes when they begin working, meaning they’re good at what they do, highly knowledgeable and able to provide guidance for complex situations that a robo-advisor wouldn’t be able to.

If you are a high-net-worth advisor, are facing a transition in your life, or a business owner, for example, a robo-advisor might not be the best option for your needs.

Control

Investors tend to vary pretty significantly in how they like to approach the management of their assets. There are plenty of investors that enjoy a set-it-and-forget strategy, meaning they can easily turn their money over to a robo-investor and take a hands-off approach.

If you’re on the other side of the spectrum, however, and you enjoy having some level of control over your investments, a robo-advisor probably won’t work well for you.

There’s also a personal element of investing to consider. Do you like the human interaction of working with a financial advisor, or is this something you view as an inconvenience or unnecessary?

The above are just a few of the many considerations to keep in mind as you decide between a technology-driven robo-investing platform or working with a financial professional.

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