Let’s say you have a particular brand loyalty to a certain type of jeans, for example, Levi’s. You have decided that this brand is your favorite, your one and only. So whenever you go shopping, you get Levi’s. Maybe you get them at a department store, a tag sale, or a specialty clothing shop. But you unfailingly get Levi’s every time. Now, no matter where you bought them, no matter how much you paid for them, they’re the jeans you wanted; your favorites. Where you got them is irrelevant.
So what does this have to do with financial planning? Only everything. A good product, be it a tangible item or a service, is good regardless of where it came from. Sure, you can go to some expensive, impressive office building and use a financial planner, or you can go online. Getting advice from someone face to face is not an automatic guarantee that this advice will somehow be better than consulting an online source.
Here’s what you need to know about online financial planners, and how they work.
Just What IS an Online Financial Planner, Anyway?
In this age of e-commerce, you can get just about anything online; dating services, travel agents, health insurance, a college degree, anatomically correct skeletons, so why not financial planning? An online financial planner is just what it sounds like: a company that provides you with advice on financial planning, but rather than making an appointment and going into a hoity-toity office, you handle all of the matters online.
There’s a number of online financial planners out there, some of them geared towards specific demographics. As a rule, the online financial planner industry targets those people who aren’t bringing in a million dollars a year, but still make enough that they can afford to invest some of that money in the future.
Online financial planners provide their clients with questionnaires, with the results then processed and calculated by computer, using financial algorithms and other factors, and come up with what’s likely to be a sound monetary plan.
What Are the Advantages of Online Financial Planners?
Other than the fact that you don’t have to get dressed up and keep an appointment in some expensive office, the huge draw for online financial planning is that it costs only a fraction of the amount a face to face planner charges. Remember, most online financial planners aren’t targeting the high rollers; they’re targeting the medium to low rollers, if those terms even exist. Certainly, though, you get the gist.
The online financial planner model is about bringing sound financial advice to a larger segment of the population, people who would otherwise not even think of consulting a planner in the first place. But if you have a little money you can set aside, and some goals for the future, it’s worth a shot.
Are There Drawbacks?
There’s no such thing as a sure thing, so as far as risk goes, it’s about the same as face to face. But to be fair, there are folks out there who really want to see an actual live human being in their airspace when talking about something near and dear to their hearts, like money. Some online financial planners schedule online virtual meeting sessions, so that clients can actually have a real-time chat with a flesh and blood human being. Other than that, there’s no obvious downside to using an online planner.
What it all comes down to is, sound advice is sound advice regardless of the source, just like a pair of Levis is a pair of Levis regardless of the store you bought them in. Spending $4,000 for some fancy financial planner to shake your hand and pat you on the back and tell you how to invest your money doesn’t guarantee any greater chance of financial gain than does some experienced experts online who have a formula tailor-made for certain financial demographics.