Investment Options for the 99%

Investment Options for the 99%


It’s the beginning of the year, and hopefully you looked over my last few blog posts with suggestions on how to put together some great financial resolutions for 2015, and 10 key themes for the 2015 economy.

While you’re still thinking about getting your life and finances in order, January is also a great time to think through if you are ready to start investing and/or meet with a financial planner.

These days there is no such thing as a “one size fits all” approach to money management. It used to be that people could only get help from financial groups if they had upwards of several hundred thousand dollars. Over just the last 10 years, though, that has changed. With technology becoming faster, smarter and more easily accessible we’ve seen every corner of the economy adjusting to include it. Finance is no different.

No matter if you have $1,000,000 or $1,000 you’ve still got questions. So let’s take a look at some options if you are seeking help with investment planning in 2015:


Financial Advisors (real live people)

There are different areas of expertise in the financial planning industry, but generally a financial advisor is someone who you will meet with at least once a year. They will help you determine how to plan out and organize your finances in an optimal manner. They will help you with investing, and handle the process of buying, selling, and re-balancing your investments.

I’m a proponent of fee-only financial advisors (in full disclosure, I am one), as this type of advisor receives no commissions, trading fees, or product kickbacks of any kind. With so many individuals and firms to choose from, a good starting point would be a Certified Financial Planner™ professional. Most fee-only financial advisors charge between 1% to 2% of assets under management per year and/or charge an hourly rate.


Traditional financial advisors may be a good fit for you if:

– You would rather delegate the investment planning responsibility

– Your savings level has become too large for you to feel comfortable going it alone

–  You need more personalized attention on financial goals and strategies

– You want a personal relationship with the team who is handling your investments

A good source to find quality fee-only advisors is through the National Association of Financial Advisors which allows you to search for fee-only advisors close to you.


Digital Advisors

A digital advisor is a good fit for someone who is interested in investing and wants some guidance from a professional, but isn’t ready for the high minimums that most traditional advisors require.

Digital advisors are primarily online, and operate differently than a traditional advisor in that you will most likely not meet them in person. Instead, these advisors will typically work with you through, phone, email, text or video chat to answer your questions and help you invest.

My team at CIA actually just launched a sister company, Wela, which is a digital advisory firm. While our new platform just launched, we’ve actually been using our investment strategies that we’re implementing under Wela Strategies with clients for several years now. Personal Capital is another digital advisory firm that has been around for several years now, and is based out of San Francisco.

Both platforms offer free financial advice to all users. Users can access a financial advisor for specific questions and set up a game plan based on their financial life events. Users can also access all of the financial planning tools on these sites at no charge. In both cases, fees are incurred only if a user decides to become a client of the advisor’s paid financial advisory services.

Wela starts their annual fee schedule at 1% for an account size of $0 – $250,000 and fees are reduced as the amount of the account size increases. Personal Capital works the same way.


Digital advisors are a good fit if you:

– You don’t meet the high minimum requirements of a traditional financial planner

– You want professional management and advice with your investments

– You want to create a global view of all your finances (investments, mortgage, credit cards etc.)

– You are comfortable with your interactions being primarily online and mobile


Robo Advisors

Robo (as it “robot”) advisors are a wonderful option for people who are looking for low-cost help with investing. These are companies that are built to be 100% online, and have little to no human interaction. Examples include Wealthfront and Betterment. They are similar to digital advisors in that they either have low or no minimum requirements to invest. They aim to charge less than digital advisors, typically in the 0.25% – 0.35% of assets under management each year.

Robo advisors are able to charge such low fees by keeping everything online. The typical process to open an investment account involves logging into the site, filling out a questionnaire on your investment tolerances, and then you receive suggestions based on their algorithms.

With such low costs, robo advisors can be a good fit for people who want to invest money for the long term, and don’t need help with other financial decisions.


Robo advisors are a good fit if you:

– You don’t meet the high minimum requirements of a traditional financial planner

– You want expert (or algorithmic) help with your investments

– You are comfortable with your investment relationship being strictly online


Bottom Line

You now have more options than ever to invest and manage your finances with professional help. No more excuses of, “I’ll get started investing next year.”


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