#roboadvisers

Man versus Machine

What do you prefer?

Your answer might depend on the nature of work and anticipated action.

To chop a plank into 100 identical pieces, you might use machines.

But to share your worries, you would prefer to chat with a friend rather than a chatbot, right?

With developments in Artificial Intelligence taking over several industries, including banking, many of us are worried about the “so-called” encroachment of machines in human life.

Humans are perceived to be better than machines where cognitive response is expected.

But to drive in quick results as required and with needed precision, technology has proved to be an enabler. And when both human intervention and technology co-exists, it can do wonders.

Many engineering marvels seen across the world are an outcome of humans and machines working together. In the world of financial engineering and investing, too, today machines (backed by human intellect) are playing the role of an investment adviser.

Yes, you guessed it right; we are talking about robo-investing or robo-advisory platforms.

[Read here: All You Need To Know About Robo-Investing]

Many investors complain that human investment advisers often fail to pay us personal attention. For whatever reasons, human investment advisers take a longer time to respond to queries. And some even make blunders while advising, putting their interest instead of the investor’s at fore.

On the contrary, a robo-adviser backed by human intellect to select best mutual funds for your investment portfolio based on your risk profile, needs, financial goals, and investment time horizon, can do a better job. It is free of human errors and turnaround time to provide you pointed recommendations is far quicker.

But such fantastic robo advisers, too, have critics.

The general tone of resistance is: Personal finance and investing is such a crucial topic, that can’t be ‘outsourced’ to machines. I need someone responsible for handling my investment portfolio. One who can understand my expectations, worries and limitations as well.

But our question: Didn’t you express your unhappiness about human investment advisers as well?

A Robo-adviser is simply a financial adviser who provides automated investment solutions online. A robo-adviser crafts a portfolio and/or engage in financial planning sans human intervention. By determining your risk profile, your asset allocation is charted out and investment recommendations are provided.

[Read:  How a Smart Robo-Adviser can Help You Chart Your Asset Allocation]

Unlike human investment advisers, you do not need to fix an appointment. You can use the services of a robo-advisory platform anytime and from anywhere.

You just need to signup, log in to your account, submit the necessary information for risk profiling, and recommendations based on a suitable asset allocation will appear on your screen within a few seconds.

It is for this convenience that robo-advisory platforms are attracting investors across all age groups today. With robo- advisory, your mode of investing can shift from signing and submitting paper forms to merely entering a transaction password.

Moreover, robo-advisory platforms are devoid of behavioural bias and help you track your investment portfolio efficiently and generate automated rebalancing signals for you.

How dependable are Robo-advisory platforms?

Robo-advisory platforms have made sensational debuts and there are many today. But how many of these are rendering valuable advice and added sense in investing, is the core question.

So, here are few questions you must seek answers to:

(Image source: publicdomainpictures.net)

Who are the people (founders/promoters) behind the robo-advisory platform and what's their experience in the field of personal finance -- their investment ideologies?

What are the services they offer –– whether only mutual fund related or a full-line, viz. financial planning and investment planning among others?

What is the technical competence of the team?

What are the processes and systems the robo-advisory platform follows to recommend mutual fund schemes?

What are the qualitative parameters used, if any?

Are they unbiased and independent, or working for commissions?

How transparent are they while charging you?

What is their track record?

Remember, a robo-advisory platform should put your interest at the fore. After all, you want effective recommendations and efficient service and not just a stylishly designed robo-advisory platform.

In addition, consider this:

Without any doubt, a robo-advisory platform makes your life easy, but that does not mean they will be transparent and more competent than human investment advisers.

Don't forget, machines have no cognitive abilities. It's the human being who feeds them. And the quality of the output depends on the quality of inputs.

Therefore, it is important to judge if a robo-advisory platform offers research-backed recommendations. After all, it is the question of your hard-earned money.

[Read:  How To Judge If A Robo-Advisory Platform Is Competent To Offer Sound Advice]  

Note that the boom in robo-advisory is attracting many fin-tech startups and mutual fund distributors’ too are launch their robo-investing platforms. But, as a prudent investor, you ought to judge who is really working in your interest.

Apart from research-backed recommendations, if a robo-advisory platform is really looking at your interest first, it should offer only Direct Plan to invest in mutual funds and not Regular Plan.

[Read: Everything You Need To Know About Direct Plan of Mutual Funds]

‘Direct Plans’ facilitate you to invest directly in a mutual fund scheme without routing the transaction via a mutual fund distributor, and is open for all categories of investors. A distinguishing feature about Direct Plan is the lower expense ratio (compared to a Regular Plan).

Hence, the NAV of a Direct Plan is higher than a Regular Plan. And do note that the portfolio is the same for a Direct Plan and for a Regular Plan of a mutual fund scheme.

Some of the benefits of opting for Direct Plans are:

You avoid the rampant mis-selling that goes on in the greed to earn more commissions.

The cost of investing in a Direct Plan is inexpensive owing to the lower expense ratio.

The lower expense ratio facilitates you to earn extra returns over the long run (see chart below).

[Read: How Even 1% Difference In Expense Ratio Can Make A Huge Difference To Your Investments]

Hence, if you wish to reap the sweet fruits of healthier returns with power of compounding, Direct Plans are for you. Both lump sum and SIP (Systematic Investment Plan) investments can be done in a Direct Plan of mutual fund schemes.

Honestly, every investor should opt for a Direct Plan to invest in mutual funds. They are best suited in the journey of wealth creation.

[Read: How To Create A Portfolio Of The Best Mutual Funds With Robo-Investing]

A robo-advisory platforms that offers Direct Plans to invest in mutual funds, work on a fee-based model The recommendations provided are uninfluenced by commisions and, hence, are unbiased; they put your interest at fore.

Finally, PersonalFN’s Ultra-Reliable Robo-Adviser, ‘PersonalFN Direct’, which offers only Direct Plans, is here…

It is backed by PersonalFN’s honest & unbiased research that has outperformed the S&P BSE-200 index in last 15 years by over 80 percent!

We are launching PersonalFN Direct, our highly awaited Robo Adviser, on the July 02, 2018.

You can sign up right away as a Founding Member of PersonalFN Direct and get over 80% discount on the first year subscription fee.

Also, if you take us up on this Founder Member offer right now, we have a special surprise for you.

Click Here to Know The Surprise.

Note that this offer is available till the 14th June or 1,000 sign ups, whichever is earlier. So, hurry and sign up right away!

5 Reasons to opt for PersonalFN Direct:

Reason #1: It offers only DIRECT PLANS

Reason #2: Offers customizable investment solutions based on your risk profiling

Reason #3:It brings outstanding research experience of over 15 years.

Reason #4: Minimal paperwork and ease of transacting

Reason #5:It comes at a pocket-friendly price

PersonalFN has consciously tried to keep the whole process simple.  You just got to follow these simple steps:

✔ Complete the registration

✔ Submit the necessary documents to activate your investment account

✔ Assess your risk profile

✔ Get a recommended portfolio based on your inputs

✔ Invest with a single click

And if this isn’t simple enough, be rest assured that our dedicated representatives will handhold you through the process.

Your long wait for one of the best robo advisory platform will end soon.

So, seize this great opportunity to take your financial journey on a whole new level. Embrace the new financial technology in your life and start investing in an efficient manner.

Happy Investing!

Roboadvisers (With Human Helpers) – The New York Times

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These firms use a combination of technology and human professionals to provide financial advice at prices lower than traditional advisers typically charge. (Digital-only services listed here generally provide automated-investing advice only, without help from human advisers.)

Robo-product

Five stand-alone financial-advice packagestailored to specific circumstances like planning…

Man versus Machine

What do you prefer?

Your answer might depend on the nature of work and anticipated action.

To chop a plank into 100 identical pieces, you might use machines.

But to share your worries, you would prefer to chat with a friend rather than a chatbot, right?

With developments in Artificial Intelligence taking over several industries, including banking, many of us are worried about the “so-called” encroachment of machines in human life.

Humans are perceived to be better than machines where cognitive response is expected.

But to drive in quick results as required and with needed precision, technology has proved to be an enabler. And when both human intervention and technology co-exists, it can do wonders.

Many engineering marvels seen across the world are an outcome of humans and machines working together. In the world of financial engineering and investing, too, today machines (backed by human intellect) are playing the role of an investment adviser.

Yes, you guessed it right; we are talking about robo-investing or robo-advisory platforms.

[Read here: All You Need To Know About Robo-Investing]

Many investors complain that human investment advisers often fail to pay us personal attention. For whatever reasons, human investment advisers take a longer time to respond to queries. And some even make blunders while advising, putting their interest instead of the investor’s at fore.

On the contrary, a robo-adviser backed by human intellect to select best mutual funds for your investment portfolio based on your risk profile, needs, financial goals, and investment time horizon, can do a better job. It is free of human errors and turnaround time to provide you pointed recommendations is far quicker.

But such fantastic robo advisers, too, have critics.

The general tone of resistance is: Personal finance and investing is such a crucial topic, that can’t be ‘outsourced’ to machines. I need someone responsible for handling my investment portfolio. One who can understand my expectations, worries and limitations as well.

But our question: Didn’t you express your unhappiness about human investment advisers as well?

A Robo-adviser is simply a financial adviser who provides automated investment solutions online. A robo-adviser crafts a portfolio and/or engage in financial planning sans human intervention. By determining your risk profile, your asset allocation is charted out and investment recommendations are provided.

[Read:  How a Smart Robo-Adviser can Help You Chart Your Asset Allocation]

Unlike human investment advisers, you do not need to fix an appointment. You can use the services of a robo-advisory platform anytime and from anywhere.

You just need to signup, log in to your account, submit the necessary information for risk profiling, and recommendations based on a suitable asset allocation will appear on your screen within a few seconds.

It is for this convenience that robo-advisory platforms are attracting investors across all age groups today. With robo- advisory, your mode of investing can shift from signing and submitting paper forms to merely entering a transaction password.

Moreover, robo-advisory platforms are devoid of behavioural bias and help you track your investment portfolio efficiently and generate automated rebalancing signals for you.

How dependable are Robo-advisory platforms?

Robo-advisory platforms have made sensational debuts and there are many today. But how many of these are rendering valuable advice and added sense in investing, is the core question.

So, here are few questions you must seek answers to:

(Image source: publicdomainpictures.net)

Who are the people (founders/promoters) behind the robo-advisory platform and what's their experience in the field of personal finance -- their investment ideologies?

What are the services they offer –– whether only mutual fund related or a full-line, viz. financial planning and investment planning among others?

What is the technical competence of the team?

What are the processes and systems the robo-advisory platform follows to recommend mutual fund schemes?

What are the qualitative parameters used, if any?

Are they unbiased and independent, or working for commissions?

How transparent are they while charging you?

What is their track record?

Remember, a robo-advisory platform should put your interest at the fore. After all, you want effective recommendations and efficient service and not just a stylishly designed robo-advisory platform.

In addition, consider this:

Without any doubt, a robo-advisory platform makes your life easy, but that does not mean they will be transparent and more competent than human investment advisers.

Don't forget, machines have no cognitive abilities. It's the human being who feeds them. And the quality of the output depends on the quality of inputs.

Therefore, it is important to judge if a robo-advisory platform offers research-backed recommendations. After all, it is the question of your hard-earned money.

[Read:  How To Judge If A Robo-Advisory Platform Is Competent To Offer Sound Advice]  

Note that the boom in robo-advisory is attracting many fin-tech startups and mutual fund distributors’ too are launch their robo-investing platforms. But, as a prudent investor, you ought to judge who is really working in your interest.

Apart from research-backed recommendations, if a robo-advisory platform is really looking at your interest first, it should offer only Direct Plan to invest in mutual funds and not Regular Plan.

[Read: Everything You Need To Know About Direct Plan of Mutual Funds]

‘Direct Plans’ facilitate you to invest directly in a mutual fund scheme without routing the transaction via a mutual fund distributor, and is open for all categories of investors. A distinguishing feature about Direct Plan is the lower expense ratio (compared to a Regular Plan).

Hence, the NAV of a Direct Plan is higher than a Regular Plan. And do note that the portfolio is the same for a Direct Plan and for a Regular Plan of a mutual fund scheme.

Some of the benefits of opting for Direct Plans are:

You avoid the rampant mis-selling that goes on in the greed to earn more commissions.

The cost of investing in a Direct Plan is inexpensive owing to the lower expense ratio.

The lower expense ratio facilitates you to earn extra returns over the long run (see chart below).

[Read: How Even 1% Difference In Expense Ratio Can Make A Huge Difference To Your Investments]

Hence, if you wish to reap the sweet fruits of healthier returns with power of compounding, Direct Plans are for you. Both lump sum and SIP (Systematic Investment Plan) investments can be done in a Direct Plan of mutual fund schemes.

Honestly, every investor should opt for a Direct Plan to invest in mutual funds. They are best suited in the journey of wealth creation.

[Read: How To Create A Portfolio Of The Best Mutual Funds With Robo-Investing]

A robo-advisory platforms that offers Direct Plans to invest in mutual funds, work on a fee-based model The recommendations provided are uninfluenced by commisions and, hence, are unbiased; they put your interest at fore.

Finally, PersonalFN’s Ultra-Reliable Robo-Adviser, ‘PersonalFN Direct’, which offers only Direct Plans, is here…

It is backed by PersonalFN’s honest & unbiased research that has outperformed the S&P BSE-200 index in last 15 years by over 80 percent!

We are launching PersonalFN Direct, our highly awaited Robo Adviser, on the July 02, 2018.

You can sign up right away as a Founding Member of PersonalFN Direct and get over 80% discount on the first year subscription fee.

Also, if you take us up on this Founder Member offer right now, we have a special surprise for you.

Click Here to Know The Surprise.

Note that this offer is available till the 14th June or 1,000 sign ups, whichever is earlier. So, hurry and sign up right away!

5 Reasons to opt for PersonalFN Direct:

Reason #1: It offers only DIRECT PLANS

Reason #2: Offers customizable investment solutions based on your risk profiling

Reason #3:It brings outstanding research experience of over 15 years.

Reason #4: Minimal paperwork and ease of transacting

Reason #5:It comes at a pocket-friendly price

PersonalFN has consciously tried to keep the whole process simple.  You just got to follow these simple steps:

✔ Complete the registration

✔ Submit the necessary documents to activate your investment account

✔ Assess your risk profile

✔ Get a recommended portfolio based on your inputs

✔ Invest with a single click

And if this isn’t simple enough, be rest assured that our dedicated representatives will handhold you through the process.

Your long wait for one of the best robo advisory platform will end soon.

So, seize this great opportunity to take your financial journey on a whole new level. Embrace the new financial technology in your life and start investing in an efficient manner.

Happy Investing!

Author: PersonalFN Content & Research Team

A bank Fixed Deposit (FD) as we all know is a secured way to generate wealth, particularly for conservative investors. It takes care of your liquidity needs, addresses short-term goals, and can even help you in tax planning (a 5-year Tax Saver bank FD).

[Read: Everything You Need To Know About Tax Planning]

But along with these attributes, a bank FD also stands as the last resort on a rainy day, when you are in dire need of funds. Yes, it helps in contingency planning!

Broadly, you have two options during an exigency: liquidate your bank FD, or take loan. If you choose the former, it can disrupt the path to wealth creation.

Hence, the latter, i.e. taking a loan against your bank FD (in the form of an overdraft) is a sensible thing to do because you continue to earn interest on the bank FD and get access to funds.

How much is the rate of interest?

(Image source: pixabay.com)

The interest rate for loan against FD is comparatively lower than for

personal (unsecured) loans

–– to be precise, just 2.0% above the interest rate earned on your bank FD.

Note that interest is charged on actual amount utilised and for the tenure of utilisation. There are no Equated Monthly Instalments (EMIs) or post-dated cheques required as in the case of other loans.

How much can be the loan tenure?

(Image source: pexels.com)

Loan against bank fixed deposit is a secured loan, the collateral being the bank FD. Hence, regarding the tenure of the loan, it is not specific ––as long the bank FD is in force. And you have the flexibility to repay the loan during that time period.  

How to apply for loan against bank FD and the process?

(Image source: thebluediamondgallery.com)

Approach your bank.

The documents required for loan against bank FD are:

Fixed deposit receipt of your bank

Duly signed loan agreement letter

Address proof

Identification proof

Passport size photograph/s

The aforesaid documents need to be accompanied by a duly filled and signed application form.

In case, you are availing a loan against bank FD from a financial institution or bank other than the one with which you have a fixed deposit, a cancelled cheque copy/s may also be needed. Every bank has its processes, whether you apply online or offline.

Once you apply, the loan sanctioning is subject to a thorough assessment, as per the extant instructions and credit policy of the bank. The availability of margin and security will not be a substitute for the due diligence process.

Once the loan is sanctioned, your acceptance to the terms & conditions will be obtained on the sanction letter.

Note that the copy of the loan agreement along with all the enclosures quoted in the loan agreement will be furnished to you at the time of issue of the sanction letter. And the sanction letter will clearly indicate the credit facility extended to you.

The loan will be disbursed to you on compliance with all the terms & conditions.

Post-disbursement supervision such as submission of periodical reports and periodic inspection will be stipulated by the bank on the sanction letter. The sanction letter would also mention whether the bank or the borrower will bear the cost of inspection.

Once the loan is disbursed, if the bank decides to recall the advance/accelerate the payment or accelerate the performance under the loan agreement/or wishes to seek additional security, a notice in this regard shall be issued to you, the borrower.

Are there any prepayment charges for early loan closure?

(Image source: thebluediamondgallery.com)

No, unlike other loans there are no prepayment charges for early loan closure.

However, do note that unless the loan against bank FD is repaid in full, you, the borrower cannot prematurely close/encash the bank FD.  

Only on repayment of the loan in full, the bank shall release all the securities held.

Overall, here are the merits of opting for loan against bank fixed deposit:

Useful means of credit particularly when you do not have a credit history

The application process is hassle-free compared to other loans

Likewise, the approval and disbursement process is quick compared to other types of loan

The rate of interest is lower than for personal (unsecured) loans

Interest is charged only on actual amount utilised and for the tenure of utilisation

No system of EMIs, you pay at your convenience as long as the bank FD is in force

There are no prepayment charges for loan against bank FD

Your other investments, assigned for other important financial goals, are left undisturbed

The path to wealth creation is uninterrupted

To sum up…

Managing contingency needs is an important part of personal finance, much as planning for defined financial goals. It is important to address liquidity needs, because uncertainties and exigencies do not come calling.

[Read: A 3-Step Guide to Building A Liquid And Secure Emergency Fund]

Taking a loan against your asset during exigencies, in this case your bank FD, would prove sensible than liquidating or getting rid of your investments built over time, with hard-earned money, to address certain financial goals.

However make sure you borrow prudently, within your means and repay diligently and sooner, in the interest of your long-term financial wellbeing and credit worthiness.

[Read: Everything You Need To Know About Credit Score]

I recommend, get your financial health checkup done today and live a healthy & wealthy life.

Also, to plan for your long-term financial goals consider PersonalFN.

PersonalFN is a SEBI registered investment advisor. The fundamentals we firmly believe in are:

✔ Client first philosophy

✔ Confidentiality of your financial data

✔ Handhold you in the journey of wealth creation and accomplishing financial goals

✔ Provide unbiased recommendation backed by over a decade long research experience

✔ Disclose any kind of income we earn from recommendations

✔ Aim to establish a long-term relationship with you, not just a financial one

Schedule a call with PersonalFN's investment consultant, or drop a mail at [email protected], or call us on 022-61361200. We will be happy to help you!

To achieve your financial goals, there's no need to fight or struggle, if you have a comprehensive financial plan charted and are determined about achieving it.

Author: Rounaq Neroy