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<p>Robo-advisers have been around long enough that the question is no longer whether you should turn your investment decisions over to a computer. Now the question is: Why wouldn&#8217;t you?</p><p>The success of Wealthfront and Betterment, two startups that helped launch the trend, led mainstream investment companies including Vanguard, Schwab and Fidelity to add robo-advice services in recent years. Depending on the robo-adviser, you may also have access to human financial advisers, socially responsible investments and tax-loss harvesting to help reduce tax bills.</p><p>This is not, and never really was, a niche product only for tech-happy millennials. From the beginning, investors of all ages spotted the significant advantages of letting computers run their portfolios. Among them:</p><p><strong>ROBO-ADVISERS ARE CHEAP: </strong>Robo-advisers &#8212; also known as automated financial advisers &#8212; use computer algorithms to invest your money and rebalance the portfolios as needed to meet your goals. Robos typically use ultralow-cost exchange-traded funds and charge annual management fees of about 0.25%, for an all-in cost that can land under 0.5%.</p><p>Contrast that with traditional investment costs, which can be 1% or even more on top of the annual management fees. It&#8217;s not unusual for investors to pay 2% or more annually, once all costs are considered.</p><p>This is a huge deal, since costs have an enormous impact on your ultimate returns and are among the few factors you can actually control.</p><p>Let&#8217;s say you invest $10,000 and market returns average 7% over the next 30 years. If you lose 2% to fees, your investment would grow to about $45,000. But if your fees are just 0.5%, your investment could reach $70,000.</p><p><strong>ROBO-ADVISERS AREN&#8217;T CONFLICTED: </strong>Robo-advisers won&#8217;t put you in an investment that costs more or performs worse than available alternatives because they&#8217;ll earn a higher commission or a free trip to Aruba.</p><p>That still happens all too often with human advisers. U.S. regulators have so far resisted calls to impose a universal fiduciary standard, which would require financial advisers to put their clients&#8217; interests ahead of their own.</p><p>Robo-adviser services aren&#8217;t perfect. The SEC in December 2018 announced a settlement with Wealthfront for making false statements about its tax-loss harvesting service. Tax-loss harvesting allows people to defer tax bills by selling a losing investment to offset the profit from a winning one. But buying a &#8220;substantially identical&#8221; investment too soon after selling a loser can cause the IRS to disallow the deduction. Wealthfront failed to properly monitor accounts against such &#8220;wash sales,&#8221; which occurred in 31% of the accounts with tax-loss harvesting over a three-year period, the SEC says.</p><p>But a quick scroll through the SEC&#8217;s other enforcement actions last year show that this is far from the worst thing that can happen to an investor. From billion-dollar Ponzi schemes to stockbrokers getting paid to steer people to high-cost funds, humans pose a much bigger danger to investors.</p><p><strong>INVESTMENT MANAGEMENT IS NOT FINANCIAL ADVICE: </strong>Robo-advisers may not be the best option for people who may panic and sell in a downturn. Those folks may need human financial advisers to hold their hands and talk them out of a bad decision. Also, you probably don&#8217;t have access to a robo option within your 401(k) - at least not yet. (Your next best option may be a target-date mutual fund, which, like a robo, does the investment allocation and rebalancing for you.)</p><p>Otherwise, most people should at least consider a robo-adviser, and that&#8217;s true even if they also need financial planning advice.</p><p>The distinction between investment management and true financial planning is often lost. That&#8217;s not surprising, since financial planners who give comprehensive advice often charge a percentage of the investments that they manage. So do many stockbrokers, who may offer financial advice in addition to their main business of investment management.</p><p>But most investment management is a commodity, while good, individualized, comprehensive financial planning advice can be priceless &#8212; and can&#8217;t be replicated by a computer.</p><p>It can make sense, in other words, to pay a premium for quality financial advice that a robot can&#8217;t offer. It doesn&#8217;t make sense to pay a premium for a service that a robot could do better.</p><style>
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<div class="neFile"><img class="neImage" src="https://www.timesleader.com/wp-content/uploads/2019/04/web1_c046d4d30dcd4623bca6b906500e17f5-fa13572b18c9486ca7dabb1e707af856-0.jpg">
<div class="neCaption">FILE - This April 2017, file photo provided by NerdWallet shows Liz Weston, a columnist for personal finance website NerdWallet.com. (NerdWallet via AP, File)</div></div><div class="metaInfo"><photo0>https://www.timesleader.com/wp-content/uploads/2019/04/web1_c046d4d30dcd4623bca6b906500e17f5-fa13572b18c9486ca7dabb1e707af856-0.jpg</photo0><caption0>FILE - This April 2017, file photo provided by NerdWallet shows Liz Weston, a columnist for personal finance website NerdWallet.com. (NerdWallet via AP, File)</caption0><photoCredit0></photoCredit0></div></div>
<div class="metaInfo"><bylineMeta><p>Liz Weston</p><p>Guest Columnist</p></bylineMeta></div><div class="metaInfo"><shirttailMeta><p>Liz Weston is a columnist at NerdWallet, a certified financial planner and author of &#8220;Your Credit Score.&#8221; Email: lwestonnerdwallet.com. Twitter: lizweston.</p></shirttailMeta></div>

Their view: Why you should love robo-advisers