3 Answers: Robo-adviser vs. Traditional wealth managers


I need to compare the performance of a robo-adviser with human investment managers. I have the returns of the robo-adviser. However, I need to know what will be a suitable benchmark to compare it to? Is there an index that tracks returns achieved by a group of private wealth managers?

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Anonymous 6 months 3 Answers 72 views 0

Answers ( 3 )

  1. The real difference here is the same as quantitative analysis vs fundamental analysis. With an online software investing tool like Robo Advisor what you will get is the best guesses of a quantitative analysis formula applied to the market.

    With a Traditional wealth managers you should be able to get someone who can read between the lines and see things that I would suspect a robot could not see.

    That being said you will also get human error, emotions and greed factoring into decisions made by humans so I am not sure which will fare better for investing success.

  2. Look at companies using fundamental analysis. Run some technical analysis and metrics. Does this company have a good moat around it? What are management doing? Is it a clubby board or is it a team of people committed to the long term growth of the company..

    Find these companies trading for less stock share price than their intrinsic value. Sometimes for even less than they have cash in the bank!

    Invest in those companies and wait. The market will agree with you soon enough, if your calculations are correct.

  3. I don’t believe in either of these. Read Securities Analysis and other books from Benjamin Graham like the Intelligent Investor to understand value stocks and become a value investor yourself.

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