Are Robo Advisors Right for You? Here's a Checklist

AMFI’s recent “Mutual Fund Sahi Hai” campaign has resulted in an interest in Mutual Fund Investments like never before. IPL watchers now enjoy the dual benefit of cricketing entertainment, coupled with Financial Education with respect to simplified Mutual Fund investing tips, tricks and fallacies! Along with the growing demand for Mutual Fund Investments, there’s been a steady rise in the number of Advisors – especially those who are choosing to leverage technology to create “robo advisory” platforms that do not have a human advisory element to them.

Their obvious convenience-related benefits aside, investors should be careful while deciding to invest, unassisted, via a 100% automated, algorithm driven robo advisory platform. Here’s a simple checklist for you to decide, for yourself, whether Robo Advisory platforms are meant for you.

You’re a “DIY” Kind of Person

In other words, you prefer mowing your own lawn, cleaning your own car, doing your own shopping and even fixing your house up with your own hands if the need arises. All in all, you’ve got a distinct preference for controlling and closely managing most elements of your life.

You’re in Control of Your Emotions

You’re as stoic and unwavering as a Spartan Soldier; never buffeted by whatever curveballs that life throws at you. You rarely succumb to temptations – and even when you do, its after an at least cursory evaluation of the situation at hand. You don’t remember the last time you panicked.

You Understand How Markets Work

Bond Yields, P/E ratios, value vs growth strategies, liquidity and quantitative easing are terms that don’t sound like Greek to you! In other words – you may not be a market expert, but you have a fair grip on the basics of what causes equity and debt markets to fluctuate.

You’re Not New to Mutual Funds

You’re not a fresh-faced newbie when it comes to Mutual Funds. You’ve burned your fingers in a poor NFO or two, uncovered and dumped at least a couple of Mutual Fund Advisors who didn’t have your best interests at heart, and you understand the dynamics of what makes a good Mutual Fund tick.

You’ve Seen – and Survived – At least One Bear Market in Your Life

Be it the tech-wreck of the early 2000s or the U.S housing collapse led meltdown of the stock market in 2008 – you’ve been a Mutual Fund investor during at least one phase when markets headed south. And of course, you’ve come out of it bruised and battered, but with hard won investment related lessons.

So just how many did you check off? More than 3? Go ahead and invest through a Robo Advisor. 1 or 2? Stick with a Human Advisor who can study the markets for you and hand hold you as markets ebb and tide. Better yet, why not invest through a Bionic Advisory platform like FinEdge that combines the ease of Robo Advisory with the Human Touch and investment counselling of a human advisor?