Last month, we launched our Guided Wealth Portfolios (GWP) platform, an automated (“robo”) investment solution coupled with oversight, review and advice from Olson Wealth Group (OWG). While it’s apparent that GWP provides entry into the market because of its low investment fees and account (an investor can sign on with as little as $5,000), it has been embraced by investors in all stages of life. Over 52% of our robo-users did not have an investment advisor before signing up for GWP. “GWP was created as a service for our client’s children who don’t need a full service provider,” said Sharon Olson, president of OWG. “GWP provides limited planning and growth opportunity for a broader base.”
Boomers and Gen-Xer’s want in.
Various surveys have put the average age of robo users between 48-52 years old. LPL Financial reports that with 83% of Gen Xer’s (59% of Boomers) owning smartphones and 73% of Gen Xer’s (54% of Boomers) on social media, they are more technically savvy then we thought. Although GWP is limited to investors 62 years of age and younger, with at least 7 years until retirement; we are seeing Gen Xer’s and younger Boomers put a small portion of their money in GWP just to try out the digital convenience.
On the other hand…with age comes life’s complications. Can robo-advice address the complex needs of investors near retirement? Older users are more likely to need advice when discussing family needs, business succession, legacy planning and more. In particular, women want someone who understands life pictures and financial journeys. Bloomberg reports that only 61% of women (vs. 75% of men) feel like they have a good understanding of their investments. This is where a CERTIFIED FINANCIAL PLANNER (CFP) can make a critical difference in pursuing client goals and objectives. That’s why Olson Wealth Group offers both GWP for self-directed clients and a separate full-service planning agreement for wealth management clients.
How does GWP work?
After completing a personal questionnaire on investment information, personal goals, time horizon and risk tolerance, investors are directed to one of three investment allocation (“Guidepath”) tracks. For instance, young investors may be placed on more of an equity tilt for long-term growth, while older investors might find comfort with the more conservative fixed income Guidepath. Your investments are strategically managed by LPL Research to adhere to your explicit retirement objectives, which you are allowed to modify at any time. If life throws you a curve ball, you simply modify your objectives and risk tolerances, and GWP reallocates your investments. And of course, OWG is available if you need to reach out to an advisor for general questions.
Digital Convenience Vs. Life’s Complications…
One of the most important factors contributing to investment success is to start young. GWP was created with them in mind. And while they may not need more sophisticated financial planning advice for some time, they (and Paul McCartney) can rest assured that OWG’s wise counsel and clear strategies will still be there when they’re 64…
Guided Wealth Portfolios (GWP) is a centrally managed, algorithm-based, investment program sponsored by LPL Financial LLC (LPL). GWP uses proprietary, automated, computer algorithms of FutureAdvisor to generate investment recommendations based upon model portfolios constructed by LPL. FutureAdvisor and LPL are non-affiliated entities. If you are receiving advisory services in GWP from a separately registered investment advisor firm other than LPL or FutureAdvisor, LPL and FutureAdvisor are not affiliates of such advisor. Both LPL and FutureAdvisor are investment advisors registered with the U.S. Securities and Exchange Commission, and LPL is also a Member FINRA/SIPC.
All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Copyright: Olson Wealth Group, Minneapolis MN April 2017