By definition, an advisor is someone that provides advice. Thus, a financial advisor would be someone that provides financial advice. Unfortunately, this definition would include just about anyone that has an opinion on money or investing. Friends, family and all the rest of the talking heads out there telling you what to do with your money are included. As you can see, the problem with the term “advisor” is that anyone that gives advice can be considered one.
The challenge you and many young families have is that you need more than advice. It’s not about a hot stock tip or what type of mortgage you select. It’s about your entire financial life and everything it entails. You need to figure out how to do it all: How do you pay down your debt and fund your retirement? How much should you be putting away for your child’s college fund? Where should you put it? The more questions you have, the more complicated it gets.
Where do you turn?
Blogs, family and friends are typically the first stop in one’s quest for answers. The challenge with these options is that their responses are not personalized (ie: blog) or even experienced (ie: friends or parents) in your specific situation.
The next stop would be a traditional financial advisor. There is no doubt they can help you. They are experienced, trained and know how to answer all of your questions. But there’s a problem. They are expensive and they typically have a minimum asset requirement. A 25 year old with student loans, living with their parents and about to get married is not their ideal client. Most advisors are chasing clients with net assets north of $500,000 and most millennials are not there yet.
Rise of the RoboAdvisor
Technology is the answer. Well, sort of. A rise in financial advice technology is upon us. Over a $260 million was invested in this space in the 2nd quarter of 2014. To say that this industry is hot would be an understatement. But user beware. Most of these “new age” advisors fall into one of three categories: Budget Nanny, Stock Picker or Hybrid. They do a specific task to solve a specific problem.
A budget nanny is a technology that tells you how much you are spending each month. They offer a great way to track expenses, but don’t tell you how much you should save or where you should invest your money. Stock pickers are great at investing a bucket of your cash. The only problem is that your cash should be invested based on your goals, not just trying to beat the market. Hybrids try to combine technology with a live person, but they are generally costly, inconvenient, and don’t give the depth of advice you would expect for the price.
iQuantifi was created to be a complete solution to the young families that can’t afford or don’t qualify to work with a traditional advisor AND need comprehensive advice. Our mission is simple. We want to help you figure it all out with real-time, individual guidance based on expert planning and investment experience. We aim to answer ALL of your financial questions and solve your financial life.
By Brian Evans, CMO