While the advent of automated “robo-advice” holds huge promise for delivering accessible, low cost investment planning tools for ordinary Australians, much of the current crop of technology falls well short on delivery.
Too many online investment management tools ignore the education piece, expecting investors to blindly accept the robo-advice outcomes.
Excessive focus on the end product and lack of a broader educational component are all issues that can limit the value of robo-advice for self-directed investors– or at the very least mean it should be taken with a significant health warning.
To address this situation, InvestSMART today launched its free next generation robo-advice solution. It steps beyond the limits of earlier technology by ensuring investor’s current assets are included in any asset allocation calculation.
“InvestSMART’s new solution is a more holistic approach that takes into account the full breadth of an investor’s current portfolio, including shares, managed funds and property. It includes a comprehensive portfolio health check which compares each investor’s existing portfolio of investments with an expert’s benchmark portfolio of investments to identify gaps in diversification.”
In a world first, InvestSMART’s robo-advice tool allows investors to simulate changes in their portfolio to move closer to an optimal allocation of investments in order to reach a desired level of diversification. Many existing robo-advice models simply direct investors to risk-profile ‘matched’ portfolios, without taking into account the investments they already have, both outside and within super. Unfortunately, the result of this narrow approach could lead to seriously adverse outcomes for investors.
“We have a strongly held view that robo-advice should not be about selling investment products, but rather be an holistic investment management tool that educates investors so they can take control of their own financial destiny and improve their own financial outcomes,” Mr Hodge explained.
Helping Australians make informed decisions about their financial future should be at the heart of any online investment planning tools. The rapid advances in technology are allowing more investors than ever before to take control of their financial destinies.
Click here to try out our robo-advice