Some investors are uneasy trusting their wealth to technology alone, and also want input from human RIAs. Fortunately, if that describes your situation, there are “hybrid robo-advisors” that combine the best of the both worlds– the low fees associated with robo-advisors with the personalized investment advice offered by human advisors.

Why Seek Human Advice?

A report by My Private Banking Research projects that the growth of hybrid models will outpace the growth of “pure” robo-advisors, reaching $3.7 trillion by 2020 and account for 10% of all investible wealth by 2025. This is due to the perceived benefit offered by personal human advisors. Individual advisors can respond to their clients individual and unique investment needs in a way that sometimes algorithms may not be able to. Investors often have personal questions about their savings, their college funds, and their retirement funds. While FSRankings does not take a position on the ability of such advisors to consistently “beat” the algorithms, human advisors certainly offer a personalized touch that pure robo-advisors cannot.

What Defines A Hybrid?

At its most basic level, hybrid just means any online advisory service that uses both algorithmic investing and human investment advisors. But broadly, robo-advisors that offer a human component fall into two broader categories:

  • Supplements to major brokerage businesses (i.e. Schwab, Fidelity, and Vanguard)
  • More “pure” robo-advisors that have incorporated humans (i.e. AssetBuilder and Betterment)

For investors who prefer to have the backing of a longstanding reputable brokerage firm, or perhaps have existing brokerage accounts, the first category is a better fit. For investors who want to start an account with low-cost robo-advisors but also want the comfort of human backing, the second category makes more sense.

The Upshot: The Best Robo-Advisors For A Human Touch

Schwab Intelligent Portfolios is the robo-advisor product offered by brokerage giant Charles Schwab. Because it is a supplementary offering to its existing brokerage business, clients have their accounts managed by an online Schwab advisor.

AssetBuilder uses algorithms to inform trades and rebalancing, but is always executed by a team of human advisors. AssetBuilder offers unlimited access to this team of advisors by phone or email. However, you do not receive your own personal advisor specific to your account. In addition to live support, AssetBuilder has a “Knowledge Center” that contains a variety of videos and articles to keep investors informed about the investment strategy and approach.

Fidelity Go is a supplementary robo-advisor product for clients who have an existing Fidelity investment advisor.  For Fidelity clients who have already invested the $5,000 minimum required for the service, Fidelity Go offers the human oversight and live support provided to all Fidelity clients combined with the low fees (0.35% for retirement accounts) associated with robo-advisors.

Vanguard Personal Advisor Services (VPAS) is the robo-advisor product offered by The Vanguard Group. For investors with at least $500,000, VPAS provides unlimited access to personal dedicated advisors through calls, emails, or video conferences. Clients with under $500,000 can still access Vanguard’s team of advisors, but won’t have their own personal advisors.

Betterment offers phone consultation services with human advisors. Investors with a Plus plan (over $100,000) receive annual phone consultations and account monitoring by a team of human advisors. Investors with a Premium plan (over $250,000) can make unlimited phone calls to Betterment’s advisory team.

 

 

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