Is financial advice by robot for you?

How to tell if you should be using a human financial adviser or a robotic one, plus the pros and cons.

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Most Australians aren’t overly interested in paying for financial advice but could advice by robot change all that?

While there are signs that the take up of financial advice is slowly increasing, a handful of dodgy practices and an unwillingness to pay for advice has kept many people wary about seeking much needed financial help.

Indeed as advice becomes cheaper through automatic platforms, known as robo-advisers or roboadvice, could this challenge the way 80 per cent of the nation views financial advice?

First, a word from Anthony “Blue” Wiggle on why he thinks keeping advice simple is key, thanks to The Investment Series by investing education business No More Practice.

The difference between employing a human financial adviser and engaging a robotic one is going to be the extent of the service, complexity and cost.

A visit to a financial advisor can give you anything from a holistic life plan or more simple cash flow and budgeting, investing, insurance and superannuation assistance.

Harry Chemay of robo-advice company Clover told Financy that

“robo-advice works best in creating investment portfolios, executing trades, and optimising periodic rebalancing.”

“Where robo-advice can’t do so well is in those high level human to human interactions, and an example is estate planning. Estate planning is highly personal and emotional, and involves an understanding of family and personal relationships. There is a complexity continuum, beyond which robo advice is less appropriate,” he said.

To help you decide whether a human financial adviser or a robotic adviser is for you, here’s some pros and cons to consider.


Because of the technology and efficiency in setting up accounts, managing, and rebalancing, robo-advisors are usually significantly lower than using a traditional financial adviser. On a $200,000 investment, a traditional advisor would charge $7,000 in fees, whereas a robo-advisor would be about 75% less.

Online or face to face
Robo-investing is web-based, so you don’t go into an office and meet with someone face to face. For some people this is a plus, but for other people, this is uncomfortable or scary and they’d much rather meet with a human.


Robo advisors are not “full-service” financial advisors. If you want to speak with someone about your spending habits, the pro’s and con’s of an investment property, insurance, or estate planning, these are services they don’t cover. Robo’s focus solely on setting up and managing investments.

Roboadvisers only advise on the money that they’re investing for you, so they don’t take into account your entire portfolio or your life and future life goals for that matter. For people with more advanced needs, complexity in tax structuring like trusts, or complex legal structures, robo’s might not be a good fit.

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