Mitch Tuchman: In the investment management business, there are a few new companies that have come about called “robo-advisors”. Robo-advisors are an online service where a client can go and interact with a computer, get some investment advice and have their money managed. It’s great for people in their 20s and 30s who are beginners- they’re beginners in life, they’re getting going, they’re paying off college loans, they’re maybe buying their first house and starting a family.
But our client at Rebalance, who’s over 45, needs a lot more than that. Similar to the robo-advisors, we use the same investment methods, we use the low-cost index funds, we use disciplined rebalancing, and there’s a lot of software involved in managing money that way. However, where the robo-advisor leaves off is where we go forward – for a more intermediate advanced investor who needs an expert, highly credentialed human being to help them think through complex issues.
For example our clients don’t usually just have one account, they have many accounts because they have had many jobs or maybe other 401(k)s to consider. There may be a variable annuity they bought. Software is not going to pick that up. Software is not going to pick up the fact that a husband and wife have a little bit of an issue because she think he takes too many risks, and she’d like to be a little more conservative. Robo-advisors won’t pick those nuances up. There are lots of other things a dedicated advisor can do to help a couple or a person sort through the nuances of funding a retirement and that are the big difference. We provide that expertise and with a dedicated team that gets to know our clients over a long period of time to help them get where they’re trying to get to with respect to funding retirement.