October, 2015 | nVest Advisors

Fees vs. commissions: why we chose the fee-only business model

When you are looking to hire a financial advisor, there are a lot of variables to consider: the advisor's experience, investment style, management philosophy, history of complaints, and list of available services are just a few. You also need to consider how they charge for their services. Traditionally, there have been two business models in our

Why we love robo advisors, and you will too.

In 2001, my wife and I bought a very large independent video store, which she managed while I took care of our two restaurants. It was a great business, and for people of my age, a bit of a nostalgic one, since the trip to the video store was always a treat when we were kids. Not too long after we began running our new business, my wife came in the front door of our home carrying the mail. One of the pieces of “junk” was a postcard advertising a new company called Netflix. She wondered if this new company was a competitive threat to our business, and asked me to look into them. I did my research and was unimpressed. “You have to wait for a movie to get to you in the mail? And then have to mail it back? What idiot would wait 3 days for a movie when they can drive over to our store and have it in their hands in 10 minutes?” I laughed off this new service as a fool’s errand. Most of our fellow video store owners felt the same way. We pressed on, thinking this new idea would soon fade away. You know how this story ends. I didn’t believe then about the impact technology could have on an entire industry, to say nothing of the speed it can move. What we thought might take ten years took less than five. And now, even Netflix’s “movie in the mail” innovation is obsolete, replaced with digital downloads and on-demand service. I was wrong. I’m human, so I’m wrong a lot. But I’m also smart enough to learn from my mistakes; to take the lessons from history, so that I’m not doomed to repeat them. When the financial service trade papers began buzzing about “robo advisors” a year or two ago, I decided to check them out. I also took note of the reaction from my colleagues and contemporaries in the industry – fellow human beings whose businesses were now being threatened by advances in technology. Their reactions are startlingly similar to the ones from video store owners in 2002, and book store owners ten years before that. “Impossible,” they all declare. “Clients need our expertise and experience and value our relationship!” While on the surface, that’s true, we believe the Robo Advisor has a real, valuable, and permanent role to play in the management of people’s money. So instead of fighting the future, like last time, this time we intend to embrace this new innovation, and more importantly, put it to work for you, our clients. At nVest Advisors, we love the robo advisor, and we think you will, too. Here’s why:

October 1st, 2015|Categories: Behavioral Finance, Company News, From our CEO, Investment Markets|
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