Robo-advisors Changing The Future Of The Investment Industry

InvestmentZen announces new robo-advisor comparison tool

As Gen Y investors begin planning for their financial future, traditional financial advisors and institutions are discovering that, unlike previous generations, Millennials aren’t flocking to the traditional financial services industry. With the Great Recession looming large as their first taste of the financial markets, research has shown that Millennials are significantly less likely than past generations to place their trust in old, storied financial firms.

But if there is one institution that Millennials do trust, it’s technology. As a result, the financial technology industry (known as “FinTech”) is emerging as a powerful disruptive trend that’s revolutionizing the landscape of financial services. As part of this emerging trend, a growing percentage of this newest generation of investors are shunning human advisors and turning instead to robo-advisors – online wealth management platforms that use algorithms based on Modern Portfolio Theory to intelligently manage low-cost, tax-efficient index fund portfolios.

InvestmentZen, a financial education and comparison platform for Millennials – recently announced a comprehensive robo-advisor comparison tool currently available on their website.

“Millennials today simply do not place the same level of trust in traditional wealth management the way previous generations did,” said Han Chang, co-founder of InvestmentZen. This claim has been backed up numerous times in publications including CNBC and Newsweek.

“We wanted to create a tool that would help the younger generation find a robo-advisor that meets their specific needs and avoids the high costs and frequent conflict of interests associated with traditional investment advisors,” Chang says.

The distrust of traditional financial advice isn’t simply a lack of financial education on Gen Y’s part. As a recent article published on Newsweek states, “professionals may not always have [a client’s] best interests in mind.”

The article emphasizes the frequent misalignment between the interests of advisors and their clients,pointing out that the hidden fees charged by advisors can compound into significantly diminished returns over the lifetime of a portfolio.

A 2016 study by AdvisoryHQ found that the average financial advisor charged 1.35% of Assets Under Management, while InvestmentZen’s comparison of the top robo-advisors on the market shows that robo-advisors charge average fees ranging from .14% to .5% of Assets Under Management – significantly less than the average 1.35% charged by traditional advisors. The tool allows users to compare fees and features for all major robo-advisor products, allowing young investors to select the product most suitable for their needs and budget.

“For investors who are just getting started – especially those with low account balances, still paying off student loans, et cetera – minimizing fees is critical to the growth of their portfolio,” Chang says. “The more time your portfolio has to grow and for compound interest to work its magic, the more important it is to minimize fees. This is one reason why many millennial investors prefer using robo-advisors as their first step to smart investing.”

For more information about InvestmentZen, visit http://www.investmentzen.com or contact Han Chang at 904-748-9119.
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Contact Info:
Name: Han Chang
Email: Send Email
Organization: InvestmentZen
Address: 600 Congress Ave 14th Floor, Austin, TX 78701
Phone: (904) 748-9119
Website: http://www.investmentzen.com

Release ID: 121682