Why you should love robo-advisers

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’t you?

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.

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. In my latest for the Associated Press, the advantages of robo-advisers.

Don’t let others pick your financial adviser

Gaylen Rust must have seemed trustworthy to the people who gave him money.

Rust was a longtime businessman in Layton, Utah, where he ran a coin shop started by his father in 1966. Rust also founded a charity called Legacy Music Alliance that funded arts programs in schools. An admiring 2013 profile in The Salt Lake Tribune called Rust “the state’s biggest proponent of arts education.”

Federal and state regulators, however, say Rust was running a Ponzi scheme. Civil lawsuits filed late last year by the Securities and Exchange Commission , the Commodity Futures Trading Commission and the Utah Division of Securities say Rust, his wife and one of his five children persuaded hundreds of friends, customers and business associates across the country to invest more than $200 million in a bogus silver trading pool.

When scam artists target groups of people who know each other or have something else in common, such as religion, it’s known as “affinity fraud.” In my latest for the Associated Press, why you shouldn’t rely solely on recommendations from friends and family when choosing a financial adviser.

How to Find ‘Advice-Only’ Financial Advisers

If you want money advice you can trust, your best bet is to hire a fee-only financial planner. The trick is finding a planner who’s willing to be hired for a reasonable fee.

Fee-only planners don’t accept commissions or kickbacks and are paid solely by client fees. Most use an “assets under management” model where they manage their clients’ investments and charge an annual fee of about 1 percent. To make the math work, these financial planners usually require people to have hundreds of thousands of dollars to invest. Otherwise the advisers would reap too little from their fees to justify the hours spent creating financial plans.

This is obviously a problem for people who don’t have enough assets. In my latest for the Associated Press, how to find financial advice that isn’t based on the size of your portfolio.

Wednesday’s need-to-know money news

North-Dakota-Oil-BoomToday’s top story: Habits that can help you build good credit. Also in the news: Lessons from the oil boom and bust, replacing your financial adviser, and how to prepare for the new Obamacare tax form.

4 Habits That Can Help You Build Good Credit
Getting in the habit of building credit.

Five personal finance lessons from the oil boom and bust
What you can learn from the volitaile oil market.

Should You Replace Your Financial Adviser In 2016?
How to tell if you’re getting your money’s worth.

Are you prepared for new Obamacare tax forms?
New year, new tax form.

Friday’s need-to-know money news

Today’s top story: What Yoda would say if he were your financial adviser. Also in the news: Why the IRA will audit you, why waiting for perfect finances is futile, and how your New Year’s Resolutions can actually hurt your credit.

10 things Yoda would say if he were your financial adviser
Save money, you will.

7 Reasons the IRS Will Audit You
Avoid hoisting these red flags.

When It Comes to Your Finances, Don’t Let Perfect Get in the Way of Better
Waiting for perfection will only dig a deeper hole.

3 New Year’s Resolutions That Can Hurt Your Credit
Yes, you read that correctly.

Thursday’s need-to-know money news

stack-of-billsToday’s top story: The bills you need to prioritize when you’re short on cash. Also in the news: Divorcing your financial adviser before your spouse, what to do when you get an inheritance, and the potential drawbacks to buying a home with an FHA loan.

Prioritize These 5 Bills When You’re Short on Cash
Creating an order of importance.

Before divorcing your spouse, consider divorcing your financial adviser
You’ll need someone who’s only in your corner.

What to do when you get an inheritance
Besides tapdancing, of course.

The Drawbacks of Buying a Home With an FHA Loan
Knowing the potential downsides.

FTC Shuts Down 12 ‘Rogue’ Debt Collectors
The tactics they used to collect a debt will stun you.

Tuesday’s need-to-know money news

Today’s top story: The most common used car buying scams. Also in the news: Saving an extra $1,000 by Labor Day, how to keep “funemployment” from draining your savings, and the qualities you should look for in a financial adviser.

5 of the Most Common Used Car Buying Scams
Don’t get taken for a ride!

How To Save An Extra $1,000 By Labor Day
Just in time for the beginning of holiday shopping.

Keep Funemployment From Draining Your Bank Account
It’s only fun if you can afford it.

4 Qualities a Financial Adviser Ought to Have
A combination of Yoda and Warren Buffett.

Monday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s top story: What you need to ask before hiring a financial adviser. Also in the news: How often you should check your credit report, the benefits of tracking all of your expenses, and retirement savings mythbusting.

20 Questions to Ask Before Hiring a Financial Adviser
Making sure you hire the right one.

How Often Should I Check My Credit?
Finding the happy medium between ignoring it and obsessing over it.

Do You Track All of Your Expenses?
How tracking all of your expenses could help you stick to a budget.

10 Retirement Savings Myths That Won’t Go Away
Time for some mythbusting!

Monday’s need-to-know money news

Zemanta Related Posts ThumbnailToday’s top story: How to raise kids who are smart about money. Also in the news: How to save on your trip to Disney World, deciding when to hire a financial adviser, and the five things identity thieves are hoping you’ll do.

3 Ways You Can Raise Kids Who Are Smart About Money
Starting them off early.

Twelve Money-Saving Tactics for Disney World
Don’t turn your wallet over to Mickey.

When is the right time to hire a financial adviser?
Knowing when it’s time to get help.

5 Things Identity Thieves Want You to Do
Don’t give the jerks what they want.

Risk and Responsibility: Should You Cosign on a Loan?
Assessing a huge responsibility.