India is a growing country. We are growing in terms of our population, in terms of our per capita income and in terms of our aspirations. India today has over 62 million households that have an annual income equal to or more than Rs 5 lakhs. However, there are only 2,500 Certified Financial Planners. It is humanely impossible for people to avail their services. With an increase in awareness of the various financial products and opportunities that come along with disciplined investing, there is a huge demand for knowledgeable advisors who can guide such people. This is a classic situation of supply of money exceeding demand.
In order to invest with these planners, one needs to meet with them at least once a week or once a month to see the status of their investments. In case of a mistake, however unintentional, it could result in you losing your entire investment. Robo advisors now give you the option of mainting a fiscal discipline from the palm of your hand. You can manage your investments from a mobile application and make changes like investing more or booking your profits with a few taps of the screen. Robo advisors also let you take advantage of historical data for an industry or for any particular security that you have invested in. Robo advisors allow you to check, automate and set instructions for your investments even in the middle of the night.
Robo advisors may not be perfect in predicting the actual rate of return for your investment, but they have successfully pointed investors in the right direction. What investors truly need is unbiased advice, but what they end up getting is securities that are pushed by investment advisors and relationship managers, who get incentives for doing so. Yes, these people are not putting their own money in these investments, but they profit by selling them – this is not advice, it’s sales!! Robo advisors are not popular today, but they surely will change the way we invest. Anyone who knows how to work with these and get the best out of them, will surely be sought after. It is definitely a skill to know.