SAN FRANCISCO (CIRCA) -- In the new world of seeking financial guidance, the big question has become whether to go with a robo-advisor or a human advisor.
Today, you can use financial planning apps like Personal Capital, Wealthfront and Intuit’s Mint to link together all your money info -- income amount, bank and investment accounts, monthly expenses and credit card and student loan debts -- which is instantly run through algorithms and even some artificial intelligence, to get a live look at how much you’re saving -- and/or how much you should be saving -- and what it all means for predicting things like home-buying or retirement.
The best part about all that: You can get most of it completely free.
Personal Capital and Mint have offered cost-free versions of their apps for some time, but Wealthfront announced this fall it would be opening up free access to its planning tool, previously available only to its investment account clients. The company says the move is meant to spread the availability of financial help, particularly to younger customers. And with automated settings for things like planning for parental leave or taking time off to travel, Wealthfront’s offer is arriving with a leg-up on some of the other free apps.
But that list of features would have to continue to grow to beat out a face-to-face with a human professional, says Sarah Behr, owner and financial advisor at San Francisco’s Simplify Financial Planning.
“Once we determine how much they need to save today, then we can see how much there is left over to spend for other goals, such as things like ... buying a new car, growing your family ... not only buying a home, but then a rent vs. own calculation.”
Behr told Circa about 60 percent of her clients are millennials, the demographic pegged as the most likely to go to apps to get financial help. But it’s not uncommon for those clients, she says, to have come to her after getting started with one of these apps and realizing they need more help.
“Sometimes they have a questions: Their student loan balloons, and their interest rate just went up," she explained. "Should they save for retirement or should they pay down the loan?"
And then there's the "human interaction" that Behr says is still pretty hard to replace with AI and a smartphone app.
"There are a lot of fitness apps, but that doesn't mean everyone loses weight or gets stronger. In the same sense, I look at myself as a sort of financial fitness trainer."
It’s obviously not free to make an appointment with a financial professional. Behr charges $300 to $400 for an initial meeting, plus additional hourly costs for as-needed follow-ups. Compared to a free app, that might not sound very good, but getting anywhere with retirement savings most of the time includes opening an investment account -- and probably more than one. And unless clients already have that part completely handled, they’ll wind up paying either a robo-advisor app -- or her -- for guidance on that anyway.
"There is a fee associated with investing with Wealthfront or Betterment, and depending on how much assets they have, my fee might be less," Behr said.
Comparison shopping on the best bargain for getting your finances and highest-yielding investments straight is obviously not a one-size-fits-all project. Most any human financial professional would agree robo-advisor services can at the very least give some quick insights and get people thinking a little straighter about their money. Behr even sends her clients to these kinds of apps to organize their information before coming in to meet.
But with more and more financial startups and traditional financial institutions increasing investments in artificial intelligence technology, we can expect the real financial robo-advisor vs. human advisor decision to be an even more difficult one to make in the near future.
In the meantime, downloading a free one to pop in your info and see what you can learn about your financial health is a no-brainer.