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Rebalancing: Robo Versus Human Advisor

ROBO Advisor concept

Hybrid advisors are becoming the gold standard in wealth management services, combining technology driven objectivity with experienced human wisdom.

As technology continues to push the industry forward in meeting client needs, wealth managers must ensure that their investment models have the flexibility to adapt, not only in growing wealth and planning, but also in reducing costs. Rebalancing helps to maintain the integrity of your risk profile while providing a discipline to buy low and sell high. If that sounds important, it is! Most Robo rebalancing strategies however, let the computer program dictate when to rebalance. This is a mistake and here’s why.

The winning strategy must be seamless and versatile. The combination of an algorithmic discipline with human experience is paramount.

The typical robo advisor of today uses an algorithmic model that rebalances at a set interval (typically quarterly) and is set to exact tolerances. History tells us that most outperforming sectors tend to trend higher for years, not months, as illustrated below:

Demand Wealth’s Rebalancing Strategy” is an algorithmic discipline along with the expertise of an experienced professional portfolio manager offering the best of both worlds.

Trend recognition by an experienced human advisor is vital to optimizing the rebalance of your portfolio. Without this longer term analysis, outperformance in one sector vs. another may be lost!

At Demand Wealth, our hybrid platform is designed to provide the objective discipline of robo investing (preset to a +-10% rebalance regardless of time) coupled with the experienced versatility of our veteran investment portfolio committee. Simply the best of both worlds when it comes to growing your wealth through proper rebalancing.

 

This report is a publication of Demand Wealth. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change.

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