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News that AAA -- the tow truck guys -- are entering the robo-advisor business made the Finance Logix point in Vegas

The Pacquiao-Mayweather crowds added to the surreal Las Vegas scene and underlined the pace-of-change theme

Author Guest Columnist Tim Welsh May 4, 2015 at 7:37 PM
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Steve Lockshin: If you are charging 1% for asset allocation and security selection, then you are dead.




Varun Hemraj

Varun Hemraj

May 4, 2015 — 8:11 PM

Great all the noise of Robo Advisors. Every Finance Journalist,Blogger writes about them talking about how it is changing the Industry, the one main thing missing from the article is the performance numbers. Client eventually will look at performance numbers and if they are bad it does not matter what fees is charged.

We are still in a bull market and the real challenge for Robo Advisors will come in a downcycle.



May 4, 2015 — 9:52 PM


Your point gets made over and over. It may be right.

But it’ll really come down to whether robo-clients can stomach losses that mirror
the broad averages. Robos invest in index funds.

It might also depend on what commentary these robos prepare and how they distribute it. It
seems possible they may be savvier than classic RIAs in managing this task.

When things get really, really, really bad, it could get tougher, though investors keep getting
more sophisticated and the little guy has been known to keep his or her cool.




May 4, 2015 — 10:04 PM

I have been advising through three Bull Markets and Two Bears. I have come to realize when the market is frothy things like dot coms and Robo advisors sprout and flourish. The above two comments have been more sanguine than I will be here.

We will have another Bear. It is inevitable. I do not wish for it as they are difficult to say the least. But mark my words. When the Bear comes he will be hungry after a long hibernation. The first meals he will eat will be Robo Advisors. They will not last through the first year of an extended Bear Market.

I am frankly surprised at all the attention paid to them here. It is as if there is literally nothing else happening in the RIA world. Can we get to talking about some other salient topics possibly? And in case you are wondering I and when I will take Robo seriously? When they garner some real assets. Until then? Nothing but chatter and sensationalism.


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