During all the recent stock market market volatility, I’ve been thinking about the long-running debate that tends to come up in the world of FinTech on the value of having an advisor.

Despite a drumbeat message to ‘ditch your advisor’ from robo advisors like Betterment and WealthFront, the reality is more and more are using advisors, who play a vital role at times like this.

While startups make a cost-comparison argument, research shows individuals working with an advisor often do better in terms of overall returns, in excess of fee difference.

This week saw a watershed moment in the world of robo advisors, with acquisition by BlackRock of FutureAdvisor.

Rather than cover this topic, I encourage readers to check out the analysis by RIA Biz.

Why Advisors?

There’s value in having a person to turn to and keep you on track. An advisor can help you plan for the future, control your emotions during times like these (e.g. market corrections) and as you enter different life stages, e.g. buying a house, planning for your kids’ education or preparing for retirement.

A recent Q&A on Periscope hosted by Chris Sacca with long-time friend and financial guru based in Austin, Owen Brainard, made this very point.

RIA’s vs. FA’s

Brainard, like other RIA’s, emphasized an argument that a big firm’s advisors only push product, and have a lower regulatory standard of suitability (i.e. putting clients in products that are suitable, but not necessarily in their best interest, or the so-called ‘fiduciary standard’).

Fees matter – but aren’t everything

While the regulatory issue is true, so-called warehouse advisors can serve clients well if you ensure the advisor is paid in a way that addresses conflicts (i.e. a wrap fee). But there’s been a lot of growth in the RIA segment, which I’ll address in a future post, since working with an advisor 100% who must be aligned with your interests makes a lot of sense.

Starting Out

If you’re a Millennial or don’t have a lot of assets, there’s nothing wrong with an app like RobinHood to buy stock (although I wish they would offer custodial accounts).

Or you can choose to set up a self-directed brokerage account at Schwab, Fidelity or any of the new-style automated investment services (many of which tend to invest you in low-cost ETF’s from the likes of Vanguard).

Market vs. World Volatility

Despite the turbulent times in the stock market, it’s important to remember all the other issues we face around the world – especially the refugee crisis in this week’s headlines.

I encourage readers to be mindful for everything they have, even with the stock markets recent dips, and consider making a donation to UNICEF or a charity of their choice.

Here’s a short video from David Beckham on the current crisis in Syria:

Please consider a donation to UNICEF or any organization helping those in need.