Hi,
If your money is sitting with a robo-advisor or a full-service broker, there’s a decent chance nobody has actually checked whether that allocation still matches your goals, your timeline, and your risk tolerance. Not because anyone did anything wrong, just because it’s nobody’s job to check.
Is your robo-advisor or broker doing something wrong?
Not necessarily. Robo-advisors aren’t a scam, and full-service brokers aren’t crooks. The problem isn’t bad intent, it’s how each one is actually built.
So what’s the real risk?
A robo-advisor builds your portfolio from a short risk questionnaire and runs you through a model, the same model as everyone else who answered the questionnaire the same way. It doesn’t know about your other accounts, your concentrated positions, your upcoming goals, or how your life has changed since you filled that questionnaire out.
A full-service broker, on the other hand, often operates under a suitability or “best interest” standard rather than a strict fiduciary one, meaning the recommendation has to be appropriate for you, not necessarily optimal, and commissions or proprietary products can be part of the picture. Either way, nobody’s confirmed the plan still fits the person you are today.
Who tends to feel this most:
- Anyone whose account hasn’t been reviewed in a while – goals change, life changes, and a portfolio built two or three years ago doesn’t automatically keep up
- Anyone one to three years from retirement – a generic risk model that doesn’t match your actual timeline is exactly where a small mismatch turns into a real problem
- Anyone holding a concentrated position – company stock, a single sector, or one big holding that’s grown into more of your net worth than you realize
- Anyone with money spread across more than one advisor or account – nobody is looking at the whole picture when it’s split up like that
How you invest is between you and your advisor, or your robo-advisor’s algorithm, and we’re not here to take that over. What we can offer is a second set of eyes on it.
That’s why we have an in-house, fiduciary Certified Financial Planner – someone who can sit down with you, look at your current allocation, and tell you plainly whether it still matches your goals, your timeline, and your risk tolerance. No sales pitch, no products to buy, just a straight read on whether what you’re doing now still makes sense for you.
Reply to this email by Monday next week and we’ll set up a free 15 minute session with our CFP. Bring your most recent investment statement, and we’ll give you a clear answer on where it holds up and where it doesn’t.
Sincerely,
—
George Dimov, CPA
Licensed and Insured
(833) 829-1120 toll free
(212) 994-8081 Fax
www.dimovtax.com