As a way to save money or start investing for the first time, some people have opted to use financial advice apps on their smartphone or tablet instead of working with a professional financial advisor. While a financial advice app can be a good supplementary advice, it can’t replace the value of working with a professional and experienced financial advisor. Here are some of the ways that a financial advice app fails to live up to the real thing.
May Not Have the Latest Recommendations
Financial advisors keep up to date about market conditions and can often forecast some predictable situations. For instance, depending on your personal risk level, a financial advisor might advise you to buy or sell stock based on your unique goals or situation. A smartphone app cannot reflect the timeliness of market changes or understand possible value opportunities.
A financial advisor gets to know you, your goals, your family, and your financial situation. Using this information, they’ll give you personalized advice tailored to your specific situation. An app cannot provide you with this level of personalization, even if there’s a real financial advisor on the other side. In an app, the recommendations must be applicable to the largest number of people. If you fall outside of that average, you may not be getting the best advice.
In a world where financial data is stolen and technology breached all too often, giving your personal financial information to an app run by an organization you don’t know or interact with can be a dangerous decision. While some apps may claim to have the best security, even the largest, most well-known financial institutions have been hacked. This includes Equifax and the Target Corporation. What are the chances that a small company distributing an app has the right systems and defenses in place to keep your information secure?
No Long Term Perspective
For most apps, especially those with monthly fees, it’s important that you see an immediate return. Why would you pay for the app monthly without results? This outlook is shortsighted. It lacks the long term perspective you need to be successful with money. Most people want to create wealth over the long term, not just right now.
Risk of Overconfidence
Let’s say that you’ve started to invest using an app and you have your first small win. This can lead to overconfidence and you may end up investing more than you should. Even professional financial advisors need to balance out risk and reward. It’s important to not let overconfidence overshadow your judgment.
Financial advice apps can be a lot of fun, as you can invest and get the advice you need wherever you are. However, these apps cannot fully replace the advice of a professional financial advisor that’s invested in your success. Talk to your financial advisor to see how using one of these apps can work into your long term financial plans.
CORDA Investment Management, LLC, is an investment advisory firm that provides wealth management services for clients nationwide. CORDA’s headquarters is in Houston, and the firm also has offices in Austin and Dallas. If you are ready to begin a long-term professional relationship with a proven investment firm, please contact CORDA today at https://cordamanagement.com or by phone at (855) 439-0665.
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