Robo or VLS?

Thrugelmir

colsten wrote: »

full-time successful gambler (true even if you won't believe it),

Meet one many years back. Unfortunately the addiction got the better of him. Few ever walk away.

frenchplonka

Al. wrote: »

Not enough to go on, what are the client's requirements?

As you might know, I run a robo proposition. So far, many clients are well informed people who want the additional service regardless of their own insight. I am getting the impression, it's something appreciated not just by 'ignorant' clients, but insightful ones too, who don't want the increased cost of HK, CS etc, and who want it looked over by someone who (hopefully!) knows what they're doing.

NLB, this is one of my robo portfolios, a more cautious one. I don't think it looks particularly 'managed'. VLS, by contrast, is. Sorry for that huge size. I'm not sure how to resize it. Rebalanced quarterly, platform, reporting, advice, funds, custody, dealing, free DFM - all for 0.82 or so, all in. I'm not saying that as a free ad; rather, to provide context.

Looks very interesting im not sure how different you are in regards a typical broker like CSD handling a portfolio ( FWIW Im planning on drip feeding into a Vangaurd Lifestyle Series60 package )

Al.

There are a few robo advisers out there (I prefer 'digital advisers'!). There's Wealth Horizon, Fiver a Day, Money on Toast etc. It's flavour of the month; will it last? I think so. Digital advice is for a novice investor who doesn't have the experience or confidence to do it himself, or for the busy professional who understands that the small premium (0.3% in my case) to be paid for having someone stay on top of things, is worth it.

It isn't for people with complicated affairs or clients who rely on the money in retirement. My status as an adviser compels me to do what brokers don't have to do - take into account, far more rigorously, your circumstances. Currently, I decline about 20% of applications to Fiver a Day. The main reasons seem to be the fact that people don't have emergency funds in place, they are investing too much in relation to their income and outgoings, or they are saddled with expensive debt.

It's more expensive (slightly) than DIY investing with a fund manager directly, much cheaper than a conventional advised service, much, much cheaper than say, HL Wealth 150, Portfolio + etc. That doesn't mean to say that cheapest is bestest. Digital advice is a new solution, that's all, a bit of a compromise of having advice but not the traditional service. It'll never be for everyone but it's perfect for some, an ideal halfway house.

In respect of the comment a heavy UK bias. The emotional aspect is true, but so too is the reality that it's a market on our doorstep - we know it well. What we know, we can understand and control better - especially important for cautious clients.

BLB53

In respect of the comment a heavy UK bias. The emotional aspect is true, but so too is the reality that it's a market on our doorstep - we know it well. What we know, we can understand and control better - especially important for cautious clients.

So, a digital adviser which is programmed to recommend 75% of the equity element of a portfolio should be allocated to the UK.

Surely it is in need of some serious re-programming - I think some human advisers may come unstuck with such a heavy UK bias.

I still think a simple VLS option is far better - lower cost, far more globally diversified and auto rebalance... and no, not managed, just keeps to the equity/bond allocation required by the investor.

gadgetmind

Al. wrote: »

In respect of the comment a heavy UK bias. The emotional aspect is true, but so too is the reality that it's a market on our doorstep - we know it well.

Which is just another way of saying it's an emotional thing.

The FTSE 100 is rather unbalanced IMO, and it relies too much on just a few sectors. We're seeing how badly this can go right now as oil and mining are taking a hammering.

Al.

BLB,

No, I didn't say that. But look at the Kames Cautious Managed fund. Possibly one of the best, and priciest. It's almost entirely invested in the UK.

VLS might be right for you. I think the turnover is somewhere in the region of 9/9.5%. Many managers confuse activity for progress, but VLS activity (or the lack of it) will be illuminating when the year is done.

I like VLS, don't get me wrong. The fund solution(s) though are only the almost inconsequential conclusion. What's important is how you get there. Digital advice isn't for everyone, neither is DIY. Which is this comparison. There is no black and white.

Al.

gadgetmind wrote: »

Which is just another way of saying it's an emotional thing.

The FTSE 100 is rather unbalanced IMO, and it relies too much on just a few sectors. We're seeing how badly this can go right now as oil and mining are taking a hammering.

Not quite (imho). If we do know something better, regardless of the motivation, it does give us a competitive advantage. I agree it's unrepresentative of our economy. For that, you have to take in mid caps.

BLB53

No, I didn't say that.

Sorry, didn't say what...?

I just fail to comprehend how a robo/digital adviser can possibly produce such a skewed recommendation.

Presumably it must be programmed by a human who tells it to churn out heavily UK biased recommendations ... and the poor punter pays extra for this... you couldn't make it up if you tried.

All the more reason for punters to get more wised up and go DIY in my opinion.

Al.

BLB53 wrote: »

Sorry, didn't say what...?

I just fail to comprehend how a robo/digital adviser can possibly produce such a skewed recommendation.

Presumably it must be programmed by a human who tells it to churn out heavily UK biased recommendations ... and the poor punter pays extra for this... you couldn't make it up if you tried.

All the more reason for punters to get more wised up and go DIY in my opinion.

There is no right and wrong. One of the reasons why VLS does have such a heavy US bias, is because the US market is easier (and therefore cheaper) to passively manage. It doesn't make it better. But it works for you right now, which is fine - I'm pleased you're investing well.

Al.

I have just been made aware of another robo/digital adviser.

http://www.destinationfp.com