This article is part of a paid partnership between TD Wealth and HerMoney Media
Sometimes you need a dedicated wealth management professional to help guide your financial life. Other times, you just need an easy and convenient goal-based investment tool. No matter where you are in your financial journey, there is an advisory offering that’s right for you.
If this is news to you, that’s because financial advice hasn’t always been accessible or affordable. Rewind to just over a decade ago and the financial advisory landscape was very different. Brokers were in the drivers’ seat, charging high commissions per trade and financial advisory services were too expensive for the masses. But when low-cost online investing tools were launched, the landscape changed forever.
Online digital investing platforms and mobile apps designed to help you set financial goals and invest your money according to your risk appetite have greatly reduced the cost of entry for advice and provide regular investors greater access to investment products and services long reserved for the wealthy. Technology is “democratizing investing. It enables us to bring advice at a much lower price point than what one might expect,” says Alyson Klug, Head of U.S. Wealth National Sales at TD Bank.
If online investing sounds like a win-win, the truth is that some people have more complex financial situations that may benefit from a higher touch approach. A “hybrid” solution—combining the convenience of an online advisor with access to a team of financial advisors who can speak to you about your goals and help you put a financial plan in place–is changing the financial advisory landscape yet again.
NO “ONE-SIZE-FITS-ALL” INVESTMENT STYLE
When it comes to investing, there is no one-size-fits-all approach. Some people want to go it alone, handling all aspects of their investments and portfolios through a personal trading brokerage account. Others want an easy and convenient online goal-based advisory relationship. Moreover, others may want a dedicated financial professional to handle it all for them. No matter your preferred path, it’s never been easier and cheaper to invest. “Education and advice are much more accessible to everybody now,” says Pam Kreuger, founder, and CEO of Wealthramp. “How to access these tools depends on the point of the view of the individual.” An investor in her 20’s may have fewer financial complexities than a woman in her 40’s, for example, and thus need less hands-on financial advice. But as her life gets more complicated, an advisor can help to ensure she stays on track as she seeks to meet her long-term goals.
What type of investor you want to be doesn’t boil down to your knowledge alone. The amount of time you must invest and your commitment level will dictate your method. “If you want to make all your own investment decisions through an online brokerage platform, it assumes you have the time, have some knowledge, and are comfortable doing it on an ongoing basis. If any of those pieces are missing, you may want to consider an advisor,” says Klug.
THERE’S AN INVESTMENT METHOD FOR EVERYONE
Investing options abound for women in the financial services marketplace—from personal trading brokerage to high touch advisory. If you choose advisory, the great thing is that different levels of financial advice and technology are now available to help you create an investment approach based upon your unique goals and investment needs.
Take robo advisors, which are the lowest cost option for investors. These digital tools put you through the paces, asking several questions to determine your risk tolerance, time horizon, and investment goals. Investing is based on algorithms that incorporate client data to recommend an appropriate asset allocation and corresponding investment portfolio for you. Portfolio monitoring and rebalancing are largely automated. The best part is that you don’t need a fortune to get started. Nor will it cost you a lot to invest. To open an account with TD’s Automated Investing offering, investors only need to invest $5,000. There’s an annual advisory fee of 0.30%, with a $75 minimum charge.
ROBO ADVISOR WITH A HUMAN TOUCH
Next on the investment continuum are hybrid advisory accounts. These are investment portfolios that add a human element to a robo advisor. Investors in these hybrid advisory accounts have access to a team of financial advisors who can assist with a financial plan and who provide goal-based advice. You do pay more for hybrid and generally account minimums are higher. For example, TD Bank’s Automated Investing Plus service, which gives customers access to a team of advisors in addition to the robo platform, requires a $25,000 minimum investment. The annual advisory fee is 0.60% with a $250 minimum. “You have to really understand what you want, what level of service, and what level of engagement, and then you have to work with a firm that has the solutions at those different points,” says Klug.
Financial coaches are another option if you need help beyond investing. These professionals won’t tell you what to invest in, but they can help you devise strategies to pay down debt, save more money, and reach your financial goals. “Let’s say your family situation changes or your financial picture is altered, you may want to reach out to a financial coach,” says Krueger. Coaches typically charge between $100 and $300 per hour.
Financial advisors are typically the last stop on the investment continuum. They are suited for investors with $50,000 or more who want advice on how to invest their money and work towards meeting their financial goals. When you work with a financial advisor, the fee structure goes up, but you also have access to a dedicated investment professional who can meet with you as required, perhaps quarterly or annually.
Ultimately, the option you choose depends on your financial situation and needs. A robo advisor may be more than enough in the beginning, but a financial advisor could be much more important as you age, your assets grow and your needs become more complex. “There’s something for everybody,” says Klug. “What you need to know is how to access help that’s tailored to your situation.”