Financial advice is evolving, and if we are going to continue delivering high-quality financial guidance and top-shelf client service, Telemus needs to evolve as well. Today, 8% of U.S. households use a robo-advisor, and the number of assets under management by robo-advisors is expected to increase from $330 billion in 2019 to $830 billion by 2024.¹
The demand for alternative modes of investment management is growing, and Telemus plans to meet that demand — without sacrificing our commitment to an excellent client experience. We’ll explain how we plan to do that in a moment, but first, let’s examine the current landscape for digital finance advice.
What Is A Robo-Advisor?
Robo-advisors are investment management platforms that use automated computer processes and algorithms to build and manage client portfolios. These algorithms rely on historical market data to build or rebalance a passive portfolio; that is, a portfolio that is primarily focused on buying and holding the optimal mix of assets given an individual investor’s risk tolerance.
When the market is stable, robo-advisors can be an effective means of long-term investing. But as we saw during the COVID-19 market downturn, sometimes it helps to have a real, human advisor helping guide your portfolio through volatility. The automatic rebalancing offered by robo-advisors is not always exact, and when there are numerous market swings in a short period of time, following a rigid algorithm is not always the best way to navigate the uncertainty. Additionally, robo-advisors also lack the support that investors may need from their advisor during periods of market unrest.
Despite these shortcomings, robo-advisory platforms do have benefits. They make portfolio management services accessible to a greater number of people, are a great way for younger people to start investing, and most offer simple, intuitive apps that make investing approachable.
Establishing a robo-advisory platform wasn’t the right path for us, but we were able to combine the benefits of automated and human investment advisory to create a bionic advisor: Telemus Digital.
Telemus Digital: A New Bionic Advisor
Bionic advisors are like robo-advisors, but they have an added layer of human interaction and support: by combining technology and human interaction, they can deliver the best of both worlds, and Telemus Digital does just that.
¹Business Insider, Less than one in ten US households use robo-advisory platforms.
²Telemus Capital, LLC had total regulatory assets under management of $3,203,083,740.78 as of December 31, 2020