From Director’s Desk | Anirudh Dar
Unbiased. Objective. Dispassionate. Committed. Possibly the kind of qualities one needs to look for in an advisor. And, also possibly the reasons why, unless you are a portfolio manager yourself, you should not manage your own investments. Pretty much from the start of my career as a mutual fund advisor, I have come across client portfolios that are devoid of any investment logic. I see investments made without a goal, purpose or plan – which is why clients do not know when to enter investments or exit them. Funds once invested in remain in their portfolios for years on end. The tools to track performance are rudimentary at best. Investment choices are seriously skewed, and currently underperforming funds are being held due to legacy status of those investments.
Enter the robo-advisor! But what are these, you may ask?
These are digital platforms that provide automated, algorithm-driven financial planning services and advice with little to no human supervision. There are millions of possibilities and combinations programmed within the robo and depending on the vectors chosen – like risk, time horizon, age of the investor etc, the system churns out real-time advice, which is needless to say, unbiased. A robo-advisor removes the age old nexus between the product manufacturer and the advisor who may be tempted to make recommendations to you basis on the amount of commissions he or she may make while selling you a particular product. A robo advisor is dispassionate in that sense because making money for itself is not a priority for it. What matters to a robo based system is that the most suited recommendations are given to its users and that they can benefit from it. The efficiencies of such a system knows no bounds as millions of advice elements can be generated by clicking a few buttons.
At Plutus, we were singularly focused on one thing right from the beginning. That was to offer investment advice that is best suited for our investors. It is for this reason, we eliminated the human element when it came to research and advice and built a system that would be unbiased. Needless to say, the humans can never be entirely replaced from our lives and it holds true for investment related advice as well.
Technology will always remain an enabler while humans will forever continue to gauge investor aspirations and help with the emotional quotient of the relationship. Technology will do the rest.