Robo-Advisors, We Need To Talk!

The one ambition I had when I was growing up was to be the captain of a ship, I wanted to navigate across the seven seas of the world. Unfortunately, I grew up in the wrong era and country, there was no internet for me to check where sea navigation courses were being offered neither is Zimbabwe conducive to nurture such kind of ambition. Therefore, that quickly fell by the way side. All of a sudden I had to change the ambition, all this in the short space of a 6 months holiday, I chose something that I thought would not be so boring. I thought if I couldn’t be out at sea, then an office that I wouldn’t have to talk to anyone would be the next big thing, I chose to do an Accounting degree. After 4 years at university, I came out with a degree and a seriously bad taste in my mouth, I had tasted it and it wasn’t going down well as a rest-of-my-life ambition. I did whatever I had to do, until one day I realised that I needed to change career path. If I couldn’t have the sea, I needed to have the money then, and what better idea than to follow in Warren Buffet’s footsteps, investments.

As a Zimbabwean girl, I had no money for the actual investments but I thought if I could eventually get to be a Hedge Fund Manager, I would be well sorted. And you are thinking, why Hedge Funds?

“Hedge Fund is a limited partnership of investors that uses high risk methods, such as investing with borrowed money, in hopes of realizing large capital gains.

Oxford Definition

Needless to say, high risk with hopes of realised large capital gains with a possible 20% performance fee for me, not a bad ambition, even I do say so myself. Did I mention that the minimum hedge fund investment is $1 000 000? Great dreams and started working towards this and before long, I heard about Robo-advisors. Seriously, can’t a girl catch a break. Are you wandering why I am mad? I will explain.

A robo-advisor is an automated investment portfolio manager, that’s the easiest definition I can give. This is basically investment advice that you get from the system with the lowest fees , minimum human interaction and no minimum investment requirement. If you are not getting it, these are websites that have been created to give financial and investment management advice based on your age, retirement goals and risk tolerance, via an algorithm it will give you the most optimum portfolio for your goals. I am not needed in the investment management space anymore, the robo-advisors are encroaching in my terrritory and it looks like this digital age has been doing it for a long time. Accountants are slowly being pushed out by easy accounting systems on the market, portfolio managers by robo-advisors, maids by washing machines and dishwashers.

My guess is that there is nothing much I can do, I can’t advocate for a new law for them to be stopped but I can work with them. My loss is your gain, so if you want to consult these robo-advisors; do check out Betterment, Wealthfront , Personal Capital, to name but a few. Consulting a financial adviser does not have to cost you an arm and a leg anymore, you can now manage your portfolio with the help of robo-advisors. There is no more excuse for you to be spending frivolously when portfolio managers are now a click of a button away.

Robo-advisors are not yet popular in Zimbabwe, except Fidelity life which has a hybrid robo-advisor, do check it out.

The digital age is here, get on board.

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