How to mitigate the risks of Robo advisors

Tim Oskam
Author
Tim Oskam

A young affluent couple in their mid-twenties has cash to invest. These millennials are mistrusting of the traditional options available via the big banks and have been exposed to some pretty convincing marketing material from the alternative, a fintech offering robo advisor services. They are confident of the outcomes – it’s low cost and long term – so sign up for their robo portfolio. The portfolio looks good. Its distribution is 80/20, there are automatic periodic deposits, a broad spread of ETFs and risk has been considerably reduced by anticipating the couple’s lifecycle.

What could possibly go wrong?