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  • Writer's pictureMichael Urch

Online Financial Advisors – Is a Robo-Advisor or Human Advisor Right for You?

Updated: Mar 22

Online Financial Advisors: Is a Robo Advisor or Human Advisor Right for You?

Should you be working with an online financial advisor aka. robo advisor? Or do you need the help of a qualified professional and fiduciary? Human vs. robot, let’s dig in.

Online Financial Advisors

As a CERTIFIED FINANCIAL PLANNER,™ Michael advises his clients on insurance planning, investment planning, retirement income planning, tax planning, and estate planning. He prides himself on being a professional advisor who puts planning before products.

What Is a Digital Financial Advisor?

Before everyone started meeting in Zoom rooms, the term “online financial advisor” was coined to refer to an online platform that allows you to manage your investments. You’re not actually working with an advisor, you’re doing DIY investing through a platform that simplifies the process.

But is this the best choice? And what are your other options?

In this article, we’ll go into the pros and cons of both traditional fiduciary financial advisors and online financial advisors.

What Is a Digital Financial Advisor?

The Benefit of Financial Advisors Who Work with You Online

Not all financial advisors have pivoted to keep up with the demands of 21st Century investors. But if you can find a financial advisory firm with fiduciary advisors who will work with you online, this may be the best option for you.


Because when you work with a fiduciary, they have a legal obligation to act in your best interest at all times. A fiduciary can’t sell you packaged investment products with excessive fees, so you can know that you have a customized portfolio for your risk tolerance and goals. 

While a robo-advisor (aka. algorithmic investment management) may provide some benefits and is certainly an improvement upon just keeping your money in your mattress, you won’t get help that’s specific to your needs and goals. You also won’t have anyone to talk you off the ledge when you go to sell all your investments when the market takes a turn for the worse.

For some people with nerves of steel who are in the very early years of investing a robo-advisor may be a good fit. But for anyone who wants guidance and is moving closer to their retirement date, working with an experienced professional who can meet online via Zoom is certainly preferable.

Should You Work with a Financial Advisor Online?

It used to be that you had to work with a financial advisor in your local area. But that’s no longer the case. At 360 Financial, we work with clients all across the US as well as within our home state of Minnesota. We’re able to give our clients full-service wealth management that rivals the big investment firms no matter where they live. If you’re an American who lives abroad for some of the year, this might be even more critical to you.

Digital nomads often earn well but don’t have their investments managed effectively.

Likewise, entrepreneurs and business owners often have all or most of their wealth tied up in their businesses. This can be risky. It’s important to have your assets diversified because then you don’t have to spend sleepless nights worrying about whether everything you’ve built might disappear with one bad move.

What Is a Robo-Advisor?

A Robo-Advisor relies on algorithms to help individuals manage their investments. The scope of advice provided is generally limited to investment advice. Many rely on their own proprietary tools to help customers rebalance their portfolios, tax loss harvest and automate other investing decisions.

What Is a Fiduciary Financial Planner?

A Fiduciary financial advisor is an advisor that has a legal obligation to make recommendations that are in the best interest of their clients. CERTIFIED FINANCIAL PLANNER™ professionals are held to this fiduciary standard in all of the recommendations that they make, not just in regard to investment decisions, but also in all other addressed during the financial planning process.

What Are the Best Digital Financial Advisors?

Betterment is one of the best known digital financial advisors. Bloom Retirement Alternative is another popular option, and Vanguard also has a robo advisor offering. All of these Robo Advisors help individuals to manage their investment portfolio.

What Are the Best Digital Financial Advisors?

5 Benefits of Working with a Financial Advisor Rather than a Robo-Advisor

1. Traditional Financial Advisors Help with Tax Planning and Estate Planning

Have a CFP® professional review your tax return for tax planning, assess whether your savings rate will help you accomplish your retirement goal, and help guide you through a conversation about your legacy planning. This is something your robo-advisor can’t do for you. And it’s just part of the reason why for anyone with substantial assets, a complex tax situation, or who plans on growing their wealth, a robo-advisor might not be the best fit.

2. Financial Advisors Prevent You from Making Massive Investment Errors

A financial advisor provides an extra barrier between you and your investment decisions. Rather than allowing our clients to quickly buy-and-sell their investments based on what they are thinking or feeling at any given moment, we provide due process. Each client gets an investment policy statement and our advisors meet as an investment committee every two weeks to review our portfolios. We do not make hasty decisions, and we stay committed to a disciplined process. This prevents clients from making catastrophic investment decisions that could affect their net worth for years to come.

3. Financial Advisors Know What Is Important to You

Everyone has their own priorities, preferences and goals in life. A good advisor is going to spend time understanding what is really important to you. Then they will create a plan that will make progress toward your goals. An algorithm can only go so far, and it does not deliver customized advice.

4. A Robo-Advisor Is No Match for a CERTIFIED FINANCIAL PLANNER™ Professional 

A certified financial planner helps in all of the realms of financial planning. Investments are only one element of a financial plan. Working with a CFP® professional will help you to view your entire financial picture and provide recommendations for far more than investments, which also often leads to a more successful investing experience.

5. The Cost of an Advisor Is Often Offset

A good financial advisor will provide their clients with multiples of their fee in value. In other words, the cost of working with a good financial advisor is worth it. But why? A financial advisor who is great at what they do will coach clients in wealth building strategies, show clients how well they are moving toward their goals, and stand between clients and bad investment decisions. They will be there for you at every important financial milestone ensuring that you make the best possible financial and wealth-building decisions.

Common Questions about Financial Advisors

Common Questions about Financial Advisors and Planners

Is it worth paying for a financial advisor?

Yes, especially if you do not have the time or temperament to successfully invest and create a financial plan on your own.

How much money do you need to talk to a financial advisor?

Generally, I recommend talking with a financial advisor after your net worth is more than $500,000.

Is it smart to invest with a financial advisor?

Yes, especially if you do not have the time or temperament to successfully invest on your own.

What is the difference between a financial advisor and a financial planner?

A financial planner is going to focus on all the areas of financial planning, where some financial advisors are focused on investment management. Titles are not standardized across the industry, so sometimes it can be difficult to tell whether someone is really able to offer financial planning. As a good rule of thumb, if you are working with a CFP® professional they are able to provide financial planning for you.

What is the difference between a financial advisor and an investment advisor?

An investment advisor or a registered investment advisor is not an individual. An RIA is an entity (or a company) that provides investment advice per the 1940 Investment Company Act. RIAs are held to a fiduciary standard. Many financial advisors are investment advisor representatives. 360 Financial is an RIA and I am a wealth manager, a CFP® professional and an investment advisor representative. I am held to a fiduciary standard both as an investment advisor representative and a CFP® professional.

How do I find a legitimate financial advisor?

I recommend working with a CFP® professional who works at an RIA. You can research at Adviser Info for information on financial advisors or registered investment advisors.

What is the average cost of a financial advisor?

Each advisor has their own fee structure. It is fairly common for advisors to charge a fee based on the investments that they are managing for you. The industry average tends to be between 1 and 1.5%. Some firms charge an additional fee for financial planning services, and some firms include financial planning in the single asset under management fee.

Are robo-advisors good for beginners?

If you are in the early years of wealth accumulation, a robo advisor can be a great place to gain some investment experience. Once you are above $500,000 in net worth, you likely would benefit more from a stronger offering.

How much is a personal financial planner fee?

Financial planners can charge hourly, on a project basis, a monthly retainer, or include planning as part of their asset under management fee. If you are paying for a stand-alone financial plan, it is not uncommon to see a charge of $3,000 – $10,000 (depending on the complexity of your situation).

Are financial planner fees worth it?

If you are in need of a financial planner, can you really afford not to work with one? In some cases, I have seen clients come out ahead financially after working with a financial planner, and I always see someone have increased confidence after having a professional create a financial plan for them.

Work with a Financial Advisor Online or In Person

If you need a wealth management team to help you achieve your big-picture goals, we recommend scheduling a call with a financial advisor at 360 Financial. 360 Financial is one of Minnesota’s best independent wealth management firms. We work with clients in Minnesota and across the US. If you’d like to work with a team that always puts your best interests first and is committed to helping you create a lasting legacy, please get in touch. 

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About the Author

Michael Urch

As a CERTIFIED FINANCIAL PLANNER,™ Michael advises his clients on insurance planning, investment planning, retirement income planning, tax planning, and estate planning. He prides himself on being a professional advisor who puts planning before products. This is one of the reasons he was attracted to 360 Financial’s client-focused culture. Michael likes to start with each client’s “why.” By understanding what’s truly important to them, the “what” of investment and planning strategies can be custom designed to support their long-term ambitions.

Prior to joining 360, he spent nine years honing his skills first at a Fortune 100 Financial Services Company and then at independent, planning-centric firms. He graduated magna cum laude from Bethel University with a BA in economics and finance, as well as a minor in mathematics.

Michael lives in Golden Valley, Minnesota with his wife, Bri and their three children. When he is not working, he enjoys exploring parks and reading books as a family, hiking, and playing guitar.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.


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