Financial Literacy

Man vs. machine

The so-called “rob-advisors”—in “man vs. machine” terms—has been the gossip around the water cooler within the financial world, insisting that the traditional advising model remains safe from automation. But is the choice really between man and machine?

Most likely not, said Chris A. Rondinelli, a partner at Seven Fields Wealth Management.

“Robo-advisors create a rules-based solution that can take the emotion out of investing,” said Rondinelli, whose Pennsylvania firm provides financial and investment planning, in addition to estate planning. “They certainly have some benefits to the clients and advisors as well. We as advisors can learn a lot from the solutions and strategies that robo-advisors put forward.”

The future wealth advisor might tap computerized counterparts to provide investment ideas and planning advice, while maintaining a “human touch” for clients who still want a person in the picture. Clients, after all, don’t necessarily want to talk to a random person sitting in a call-center, or to a machine, Rondinelli said. The hybrid model can boost the advisor’s client capacity—less number-crunching means more face-time with investors— while drawing on the robo-advisor’s ability to plan without sentimentality, he added.

Seven Fields Wealth Management provides customized services to clients transitioning to retirement and younger clients just starting to invest. There is no firm minimum, which Rondinelli said allows Seven Fields to work with anyone it wants by setting up investor-specific fees or payment solutions.

“The challenge of our industry today is to create a profitable solution … That’s a little bit of a challenge, but it’s something I’ve been working on because I find the work rewarding,” Rondinelli said.

Rondinelli takes on these younger clients because they often struggle to understand how best to use their money.

“At the simplest level I see myself as a teacher,” said Rondinelli, who lectures at a local community college. Rondinelli breaks difficult financial concepts and jargon down for clients so that they can focus on how their money is working for them. Providing tailored solutions requires transparency – such as making 401k disclosures available and easy to understand – and a fiduciary outlook that puts the client first.

The solutions also tend to lack the “sexiness” of CNBC “beat the market” shows and get-rich-quick investment paperbacks. Clients looking to beat the market should think again, goals matter more, Rondinelli said.

“The focus shouldn’t be on trying to beat the market … It really should be about clients making smart decisions,” he said. “It may sound obvious and boring, but you really need to start with a clearly defined goal.”

Above all else, clients need to keep the big picture in mind and avoid getting lost in the weeds.

“It is complicated but the solutions don’t need to be as complicated as they seem,” Rondinelli said.

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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Securities offered through LPL Financial, Member FINRA & SIPC. Investment advice offered through Good Life Advisors, LLC, a registered investment advisor. Seven Fields Wealth Management, Good Life Advisors and LPL Financial are separate and non-affiliated companies.

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