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With so many investing options available, it can be difficult to determine the right one for you. Robo-investing is becoming increasingly popular for its’ ease of use and low cost. But without an advisor to guide you, are you comfortable enough to do it on your own? Having a dedicated seasoned advisor can certainly put your mind at ease, but are the fees worth it? At the end of the day, are any of these options going to make you more money?
Let’s get the last question out of the way first. There is no irrefutable evidence that any option is going to make you more money than the other. There are certainly compelling arguments on the features each offers, however at the end of the day no one is going to guarantee you that they will outperform.
Even if there isn’t a definitive answer on which option will make you more money, there are definitely differences with respect to cost and the level of customized service and products you have access to. It’s up to you to determine which is best for you.
Music and investing have a number of things in common. Both have the ability to illicit strong emotions (eg. joy, sorrow, boredom) and both can also cause irrational behaviour (e.g. the Macarena, mosh pitting, buying Bengal tigers, bubbles).
They have their differences as well. No one is using old mix tapes to fund their retirement (“apologies ex-girlfriends, but at least the memories are priceless”) and no one is playing Warren Buffet’s Berkskire Hathaway annual update at a New Years party (…but maybe give it to Pharrell and who knows?…).
Determining how you should invest your money is an important decision and one that shouldn’t be taken lightly. To help provide some context around the alternatives, we’ve put together a high level guide using music to help you understand which one may be right for you. In these scenarios, you can substitute music for investment products and DJs or musicians for advisors.
If you like free music streaming services (e.g. Spotify), then you may prefer: Robo-Investing
You’re the kind of person that likes the convenience of your product on the go and the ability to easily access your information anytime. You appreciate a technology driven low cost product and believe sophisticated algorithms are capable of making the right decisions for your needs. You like the ability to choose genres and moods but aren’t overly concerned with having customized access to a complete suite of music. (Note: Robo does offer financial planning at certain asset thresholds. )
Cost:♫
Customization: ♫
If you like to listen to the Radio you may prefer: Buying Mutual Funds at the Bank or with an Independent Financial Planner
If you enjoy the simple sounds of the radio, then you may be the ideal client for bank branch-based investing. You appreciate having an actual person to help you rock out and to console you if the markets leave you feeling the blues. You like the convenience and comfort of a traditional solution and only need a decent selection of product and not every option on the market.
If you prefer talk radio and hearing experts provide opinions and insights on various topics and aren’t as concerned about the music, you may prefer dealing with a qualified dedicated independent planner.
Cost:♫♫
Customization: ♫♫
If you subscribe to satellite radio (e.g. Sirius XM) you may prefer: Full Service-Brokers
If your musical preferences demand a complete spectrum of musical genres and a professional DJ programming the music you listen to, then you may be the kind of individual that prefers full service brokerages. You appreciate having a real person with experience and history customizing and giving you the stories behind the music, and you don’t mind spending a little more for premium service.
Cost: ♫♫(flexible based on asset size)
Customization: ♫♫♫
If you are the kind of person that hires professional musicians to play your parties, you may prefer: Private Investment Counsellors
You have money and you demand the best. At your parties, you hire professional musicians to play the music you want and even have them sing “Happy Birthday” to you and your friends. If you customize the entire experience, beyond just the music, including AV techs, and lighting you may consider Private Banking as well.
Cost: ♫ ♫ (flexible based on asset size)
Customization: ♫♫♫
If you are the kind of person who DJs, you may prefer: Do-It-Yourself (DIY) Investing
You demand complete control and mix your music exactly as you want to hear it and don’t require anyone else driving your experience. You study what the crowds are reacting to and are willing to dedicate the the time to stay on top of the latest trends.
Cost: ♫
Customization: ♫♫♫
This article is meant to provide a light high level summary of various investing alternatives via different music preferences. Music and investing do have some similarities, but have important differences not covered in this post. Before making any decisions, be sure to investigate all options and speak to various representatives of each to determine which is best for you.