2016-04-26
Online financial advisers, or "robo-advisors," give self-directed investors a way to take more control over their portfolio. Alternative investment companies such as Betterment, Wealthfront and Motif can provide investors with a cost-efficient, hands-on method of trading and managing their funds, but many investors wonder if robo-advisors can actually take the place of a flesh-and-blood financial advisor. Remarkably, in many cases, the answer is "yes."
Robo-advisors offer some compelling benefits over traditional financial advising models, the most apparent of which are low investment minimums and modest fees. Many firms have minimums as low as $5 to $10, while others don't have any minimum investment requirements at all, decreasing the barrier to entry. Online investment advising platforms also usually only charge from 0.25 to 0.75 percent in management fees, compared to one percent or more with traditional advisors. There is even a trend toward free robo-advising services, with companies such as WiseBanyan pioneering this innovative approach. The costs of making trades and other account adjustments are often more transparent as well, with clearly defined, straightforward fee schedules. All of these aspects work together to maximize investors' ROI. In addition, customers gain access to many of the same investment analysis and planning tools that are used by professional financial advisors, which makes it possible for these customers to make knowledgeable financial decisions on a DIY basis. Some robo-advisor firms even offer educational materials, such as webinars, emails and other resources, to help their customers stay informed. The automated approach to financial advising is also more convenient and less time consuming than having to schedule face-to-face or over-the-phone meetings with a professional investment manager. The customer-centric nature of robo-advisors also leads to a more user-friendly interface than traditional financial advisor dashboards, making it easier for investors to take control of their portfolios.
No investment is guaranteed, and they all carry some measure of risk and volatility. Even the best performing investments are subject to the ebb and flow of the financial markets, and these effects can be unpredictable. However, robo-advisory firms have a few safeguards in place to hedge against those risks. First and foremost, robo-advisory firms are required to file as Registered Investment Advisors with the Securities and Exchange Commission. This means they are legally and professionally bound to certain fiduciary duties and other legal requirements, including specific disclosures regarding fee structures, trading and brokerage processes, and conflicts of interest. In addition, most of these platforms are backed by the Securities Investor Protection Corp, insuring up to $250,000 in assets. These protections make automated advisory companies just as safe as traditional financial advisors on the consumer-protection front. In addition, these platforms use elaborate algorithms to develop automated recommendations based on responses to a questionnaire that measures an investor's return objectives and tolerance for risk. The platform then recommends a mix of investments that are diversified across a number of asset classes that include:
This diversification provides some protection against risk and loss, as investments are spread over a variety of sectors. Online advising platforms also allow for a more systematic approach to the development and maintenance of a portfolio. Investors are not only able to establish more concrete objectives, but better adhere to the plans that they create. This encourages investors to ride out periodic market fluctuations and reduces the return-jeopardizing urge to buy and sell unnecessarily during financial storms. However, robo-advisors also offer enough flexibility that you can easily change your asset allocation if need be.
The robo-advisor approach is increasing in popularity, and this trend is projected to continue into the foreseeable future. Much of this ability to successfully compete with the long-standing big names in financial and investment management is the similarity between robo-advisors and traditional advisors. The very basis of the robo-advising is to provide a reliable selection of exchange-traded funds that investors can basically place on autopilot, establishing a passive revenue stream. This strategy is similar to the turnkey asset management and wrap account programs offered by conventional advisors. However, in many cases, the simplicity, cost-effectiveness and hands-on ability offered by automated online financial advising trumps the services offered by traditional investment advisory firms such as John Hancock and Vanguard, especially for tech-savvy Gen Xers and Millennials. This growing demand for do-it-yourself advising services have not gone unnoticed by traditional advisory companies. In response to the encroachment on their market share, some long-standing firms have launched their own versions of online advising, as with Charles Schwab's Intelligent Portfolios service. In other cases, financial management companies have formed alliances with robo-advisory platforms, such as the partnerships Fidelity Investments formed with Betterment and Learnvest. As the robo-advising method of financial management continues to expand, investors can expect to see additional offerings from conventional advisors and newly established automated advising platforms alike. While investors may be wary of this newcomer on the playing field, the advantages offered by robo-advising services have them poised to become staples of financial management. As with all financial matters, due diligence and careful consideration are key. However, those who choose to go the self-directed route may just find that financial advisors aren't the only effective way to invest.
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NEW YORK, NY, March 15, 2022 -- Even Financial ("Even"), the category-leading embedded finance marketplace and independently managed subsidiary of MoneyLion, Inc. (NYSE: ML), has announced a new partnership with Tally, a leading financial automation company, to include the company's low-interest credit offerings on its platform.
"Tally has built a powerful tech-enabled system to help people solve one of the biggest financial problems today: paying off credit card debt," said Phill Rosen, Founder and CEO of Even. "We're thrilled to welcome Tally's line of credit offerings to Even's unparalleled network of financial services providers."
Tally is designed to help its members pay off their debt faster and save them money on interest and late fees. Members can lower their monthly payment with Tally's lower-interest line of credit, if eligible. Typically, at least a 580 FICO score is needed. Tally's system is customized to save people as much money as possible.
"Americans today owe nearly $1 trillion in credit card debt. We know from our research that many want to pay down their debt but struggle to get started. That's where Tally comes in," said Jason Huynh, VP of Credit, Analytics & Operations at Tally. "Our system combines financial automation with a low-interest line of credit to give people the help they need to get on track to pay off their credit card debt for good. We're thrilled that our partnership with Even will allow Tally to help even more people."
The launch of Tally on the Even platform enables consumers to get matched with Tally's custom, low-interest line of credit accounts of up to $25,000 in just a few minutes. After getting matched, eligible consumers complete the process through the Tally app. There are no out-of-pocket costs.
Tally is the latest partner to join the Even marketplace, a growing network of over 400 financial services partners and 500 channel partners covering a breadth of financial services including loans, credit cards, mortgages, savings, and insurance products. Even's marketplace technology enables any company to add financial products to its business, with full compliance and security, at scale.
About Even Financial
Even digitally connects and matches consumers with real-time, personalized financial product recommendations from banks, insurance carriers, and fintech companies on mobile apps, websites, and other digital touchpoints through its marketplace technology. Even's infrastructure leverages machine learning and advanced data science to solve a significant pain point in financial services customer acquisition, seamlessly bridging financial services providers (such as SoFi) and channel partners (such as TransUnion) via its industry-leading API and embedded finance marketplaces. Even enables any company to add financial products to its business, with full compliance and security at scale. Even was named one of "America's Best Startup Employers'' by Forbes for 2021 and was named to the 2021 Deloitte Technology Fast 500, which recognizes the fastest growing tech companies in the world. Learn more at www.evenfinancial.com.
About Tally
Tally is a consumer financial tech company pioneering full-service financial automation to help people save money, pay down their debt and reach their goals sooner. Founded in 2015, the company built the first fully automated debt manager to help put billions of dollars back in people's pockets. In 2021, Tally was named to Fast Company's Most Innovative Companies list and to Quartz's Best Companies for Remote Workers. Previously, Tally made Forbes' Next Billion Dollar Startup list, Forbes' Fintech 50 list, and the app won Real Simple's Smart Money award. Learn more at meettally.com.
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NEW YORK, NY, April 19, 2022 -- Even Financial (“Even”), the category-leading embedded finance marketplace and independent subsidiary of MoneyLion, Inc. (NYSE: ML), has announced it has now facilitated over $5 billion in consumer credit, as of March 2022. Leveraging machine learning and advanced data science, Even solves a significant pain point in financial services customer acquisition by seamlessly bridging financial service providers and channel partners via its industry-leading API and embedded finance marketplaces.
“Surpassing $5 billion in consumer credit facilitated through our marketplace is an enormous achievement for Even as we continue to help build the future of finance technology,” said Phill Rosen, Founder and Chief Executive Officer. “Access to credit has long been a challenge for many hard-working Americans, and we are dedicated to alleviating this issue by providing consumers personalized financial services offers that meet their needs, when they need it most. Reaching the $5 billion milestone reaffirms that our mission is driving significant value for both consumers and our partners."
Even has grown its embedded finance marketplace offerings beyond loans to cover a breadth of additional financial services including credit cards, mortgages, savings, and insurance products. Within loans, Even offers the largest network of premium, connected loan providers - across a wide array of products including unsecured personal loans, secured personal loans, line of credit, student loan refinancing, and auto loan refinancing. Leading financial services providers, such as LendingClub and SoFi, partner with Even to reach qualified consumers searching for loans, benefiting from Even’s unparalleled network and native integrations.
The company has continued its rapid growth trajectory in 2022, growing its network to include over 400 financial services partners and 500 channel partners. Even's marketplace technology enables any company to add financial products to its business, with full compliance and security at scale. Earlier this year, Even announced the close of its acquisition by MoneyLion, the award-winning digital financial platform, which will continue to advance their combined efforts of providing financial access and advice to hard working Americans.
About Even Financial
Even digitally connects and matches consumers with real-time, personalized financial product recommendations from banks, insurance carriers, and fintech companies on mobile apps, websites, and other digital touchpoints through its marketplace technology. Even's infrastructure leverages machine learning and advanced data science to solve a significant pain point in financial services customer acquisition, seamlessly bridging financial services providers (such as SoFi) and channel partners (such as TransUnion) via its industry-leading API and embedded finance marketplaces. Even enables any company to add financial products to its business, with full compliance and security at scale. Even was named one of "America's Best Startup Employers'' by Forbes for 2022 and was named to the 2021 Deloitte Technology Fast 500, which recognizes the fastest growing tech companies in the world. Learn more at evenfinancial.com.
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