A Canadian businessman explains one thing that robo-advisors can’t do for investors
Robo-advisors are becoming a formidable force in finance thanks to developments in fintech regulation and research, but one Canadian businessman believes that the human advisory business will never die out.
Kevin O’ Leary, who has business interests in the US including his own line of ETFs and an app-based investment platform, recently explained the relevance of human financial advisors based on his relationship with his financial advisor.
“[O]n the fixed-income side [of my portfolio], I need an advisor that is a technician in being able to trade credits, bonds, bank loans and also a voice to challenge my assumptions,” he told WealthManagement.com. “She's incredibly smart. She's very skeptical. I need that because I always have a lot of ideas in fixed income that I want to pursue.”
He explained how his advisor constantly challenges his investment preferences by telling him about the realities of the market and reminding him about maximum percentage allocations he’s committed to maintaining.
“[P]eople don't understand: The relationship, even if it has tension, between the advisor and the investor is crucial,” O’Leary said. “You'll never be able to robo this. People walk over robos … The robo never pushes back.
“The advisory business is going to be here forever because people need a mirror, a reverse of themselves to force them to diversify,” he said.
O’Leary also weighed in on the fiduciary rule, which the US Department of Labor (DOL) put into effect just last week. He declared that advisors have to “move on” and focus on adding value for their clients because the investment world will shift irreversibly toward total fee transparency.
“What politician is going to put up their hand and say I want less transparency in the market? Nobody,” he said. “Not a Republican, not a Democrat, not an Independent. So it's here to stay. That's my view.”
For more of Wealth Professional's latest industry news, click here.
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Kevin O’ Leary, who has business interests in the US including his own line of ETFs and an app-based investment platform, recently explained the relevance of human financial advisors based on his relationship with his financial advisor.
“[O]n the fixed-income side [of my portfolio], I need an advisor that is a technician in being able to trade credits, bonds, bank loans and also a voice to challenge my assumptions,” he told WealthManagement.com. “She's incredibly smart. She's very skeptical. I need that because I always have a lot of ideas in fixed income that I want to pursue.”
He explained how his advisor constantly challenges his investment preferences by telling him about the realities of the market and reminding him about maximum percentage allocations he’s committed to maintaining.
“[P]eople don't understand: The relationship, even if it has tension, between the advisor and the investor is crucial,” O’Leary said. “You'll never be able to robo this. People walk over robos … The robo never pushes back.
“The advisory business is going to be here forever because people need a mirror, a reverse of themselves to force them to diversify,” he said.
O’Leary also weighed in on the fiduciary rule, which the US Department of Labor (DOL) put into effect just last week. He declared that advisors have to “move on” and focus on adding value for their clients because the investment world will shift irreversibly toward total fee transparency.
“What politician is going to put up their hand and say I want less transparency in the market? Nobody,” he said. “Not a Republican, not a Democrat, not an Independent. So it's here to stay. That's my view.”
For more of Wealth Professional's latest industry news, click here.
Related stories:
Why mutual fund investors earn less than their funds
Morningstar reports better investor returns from automatic savings plans
