Even Staff

2016-04-26

RoboCop saved lives...Robo-Advisors save you money

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."

Benefits

 

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.

Are They Safe?

 

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:

 

  •          Equities, from volatile emerging market stocks to shares of established, reliable companies
  •          U.S. and international government bonds
  •          Real estate investment trusts

 

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.

 

How Are They Competing?

 

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.

 

Disclaimer: The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the suitability of any Even Financial product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional. Any information or statistical data sourced by Even Financial through hyperlinks, from third-party websites, are provided for informational purposes only. While Even Financial finds these sources to be accurate, it does not endorse or guarantee any third-party content

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Even Financial Partners with Figure to Add Blockchain-Enabled Personal Loan Products to its Financial Services Marketplace
EVEN
Even Financial Partners with Figure to Add Blockchain-Enabled Personal Loan Products to its Financial Services Marketplace
New York, New York – June 2, 2021 – Even Financial (“Even”), the leading search, comparison, and recommendation engine for financial services, has announced a new partnership with Figure to launch the company’s personal loan products on the Even platform. Leveraging machine learning and advanced data science, Even solves a significant pain point in financial services acquisition by seamlessly bridging financial institutions and channel partners via its industry-leading API and embeddable solutions.   Figure is a fintech company that leverages AI, blockchain, and analytics to deliver innovative consumer financial products with speed and ease. Figure has dramatically decreased the time it takes for consumers to secure loans and has significantly reduced the costs associated with loan origination, servicing, financing, and capital markets execution. The company was founded in 2018 to unlock new access points for consumer credit products that can transform the financial lives of its customers. In addition to personal loans, it provides mortgage refinancing and home equity release solutions, including home equity lines of credit, home improvement loans, and home buy-lease back offerings for retirement.   Figure is an exciting, advanced provider that is driving transformational change in consumer credit,” said Phill Rosen, Founder and CEO of Even Financial. “We’re thrilled to welcome them to Even’s unparalleled network of loan products.”   Shwetabh Gautam, Director of Financial Institution Partnerships at Even added: “We continue to see a strong resurgence in the demand for lending products across the millions of consumers Even surfaces offers for each month. The addition of cutting-edge partners like Figure strengthens our ability to connect consumers with the loans best suited for their unique needs.”   Even offers the largest network of premium, API-connected loan providers. Enterprises and established publishers such as MoneyLion and TransUnion partner with Even to power financial product offers for loans and other financial services including insurance, credit cards, and savings. Within loans, Even continues to expand its vast offering, recently launching products for secured lending, line of credit, and auto refinancing.   The launch of Figure on the Even platform enables consumers to get matched with personal loans of up to $50,000. Figure offers a 100% online application that allows applicants to apply and see their rate in minutes and access funding in as few as two days.   “Phill and the team at Even share our vision of leveraging blockchain technology to make financial services simpler, faster, and personalized. Through the Even platform, we will be able to reach a broader and more diverse set of consumers seeking our innovative credit products,” said Brad Simmons, CMO of Figure.   Even has continued its rapid growth trajectory in 2021, facilitating over $3 billion in consumer credit issued through its API and expanding its platform to over 400 partners. Earlier this year, Even was named one of “America’s Best Startup Employers'' by Forbes for 2021 and placed in the Top 50 of the 2020 Deloitte Technology Fast 500, which recognizes the fastest growing tech companies in the world.    About Even Financial Founded in 2014, Even Financial is a B2B fintech company that is transforming the way financial institutions find and connect with consumers. As the leading search, comparison, and recommendation engine for financial services, Even seamlessly bridges financial institutions (including American Express, Goldman Sachs, and SoFi) and channel partners (such as MoneyLion and TransUnion) via its simple yet robust API and embeddable solutions. Even turns any consumer touchpoint into a comprehensive financial services marketplace with full compliance and security at scale. The company is backed by leading financial services firms and VCs, including American Express Ventures, Canaan Partners, Citi Ventures, Fidelity’s F-Prime Capital, Greatpoint Ventures, Goldman Sachs, LendingClub, and MassMutual Ventures. Learn more at www.evenfinancial.com.  About Figure Figure is transforming the trillion dollar financial services industry using blockchain technology. In three short years, Figure has unveiled a series of fintech firsts using blockchain for loan origination, equity management, private fund services, banking, and payments sectors – bringing speed, efficiency, and savings to both consumers and institutions. The company was founded in 2018 by serial technology entrepreneur Mike Cagney, who also founded SoFi and built the company into a multi-billion dollar business under his leadership as CEO. Learn more at www.figure.com.   Media Contact media@evenfinancial.com
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PYMNTS
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Now, financial advisors and other businesses will have a way to leverage Even’s platform for their clients. ‘Financial Products for Salesforce’ - Powered by Even, a plug-and-play app available on the Salesforce AppExchange, matches consumers with real-time, personalized financial product offers.   Click below to read more at PYMNTS.com.
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