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Ed Meek
CEO/Investment Advisor

Edge Portfolio Management


State: IL

At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, playing and following basketball, playing golf, and participating as an advisory board member for Breakthrough Urban Ministries.

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Financial Advisors: Robo vs. Human

If a successful financial advisor-client partnership is all about the relationship, where do robo-advisors fit in?

| BY Donald Liebenson

If a successful financial advisor-client partnership is all about the relationship, where do robo-advisors fit in? Which is a better fit for investors?

Millionaires surveyed by Spectrem’s Millionaire Corner see several benefits of working with a human financial advisor. The highest percentage (75 percent) say that working with a financial advisor improves their knowledge of investing, while roughly two-thirds (64 percent) said that it provides them with a wider range of investment opportunities. A majority of Millionaires also stated that it improves their investment returns, and that it gives them “peace of mind.” Nearly half (48 percent) like being able to delegate responsibilities to an expert.

The highest percentage of surveyed Millionaires have been with their financial advisor for between 3 to less than 10 years, while 19 percent have been with their advisor for between 10-15 years, and 22 percent for longer than that.

But it’s also true that a majority of Millionaires believe that the services of a financial advisor are expensive. This may, in part, account for the rise of the machines. But at what cost to the industry?

In October, Charles Schwab announced that in the first quarter of 2015 it will offer automated investing advice for free (as in no advisory fees or commissions) The service, Schwab Intelligent Portfolios, is being branded as “your personal investing algorithm,” It will be available to investors with at least $5,000 to invest and will include 24/7 support from a licensed representative. Based on an online survey, an algorithm will construct a diversified portfolio of exchange-traded funds (ETFs) appropriate to the investor’s risk tolerance. Rebalancing is automatic

Other providers and custodians recently announced their own robo-advisor initiatives, among them TD Ameritrade and Fidelity Investments. reports concern among industry analysts about the impact of Schwab’s product on investment advisors who custody with the company. William Trout, a senior analyst with Celent's wealth management unit, told the website that even if the service appeals to mass affluent clients who may not need a full adviser relationship, it is likely to put additional pressure on advisers to drive down their fees. “The big issue, of course, is that the Schwab move puts downward pressure on RIAs' relatively high fees, even if the RIAs say they are offering a better, more personalized service,” he said.

This might not bother affluent investors so much. Half of Millionaires surveyed by Spectrem’s Millionaire Corner find the services of a professional advisor to be very expensive. The percentage is higher among non-Millionaires with a net worth of at least $100,000 (57 percent).

Between the so-called robo-advisor and a human financial professional, the former has the edge when it comes to price and convenience, but the latter is recommended for investors with more complicated financial situations and for those who like to be actively involved in the day-to-day management of their portfolios. For investors with a more aggressive risk tolerance, it should be noted that portfolios managed by robo-advisors tend to be invested in conservative products, such as ETFs.

About the Author

Donald Liebenson

Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.  

A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.