Ask Terry Questions Robo-Advisers


By Terry Savage on September 08, 2015 | Insurance & Annuities

Terry; perhaps you’ve already seen my post to your FaceBook page (if not, I’ve included it below), but I am curious as to the reason Financial Engines is not included among those mentioned in your article; particularly since it’s one you’ve had mentioned on your website for years now.
“While the financial services industry spends millions lobbying the provisions, the robo-advisers (technology based advice providers) are growing by leaps and bounds — providing unbiased, low-cost advice to retirement plan investors.”
I agree with your observation regarding the proliferation of the robo-advisers. However, in my opinion, what retirement plan investors need to fully be aware of is that the algorithms, which form the backbone of the various robo-advisers, seem to be as diverse, and only as good as the opinions of their creators. I have plugged in identical, real-time figures concerning my own portfolio and retirement horizon into no less than six of the robo-adviser sites; each resulting in vastly different recommendations and outcomes. So while their advice may be unbiased; the conundrum becomes; which is closest to being “correct”; or at the very least, having the best sound advice?

Terry Says:  Aha, you have exactly put your finger on the problem.  As with Monte Carlo retirement investment and withdrawal advice (available at major mutual fund companies, and through  financial planners), we will never know until hindsight which is/was the “best” advice to follow!  The idea is that at least you have a plan, and stick to it.  Over the long run, that kind of discipline and following a plan from a major advisory service, is most likely to yield successful results!

Oh, and I have long been a big fan of Financial Engines.  It is mostly offered as an advice provider through corporate retirement plans, unlike the others I mentioned.  However,  if you use the link to Financial Engines at my  website, you will get a one-year free trail of FE, so you can see how it works!



a personal
finance question