 |
Traditional Financial Advisor | Robo-Advisor | |
|---|---|---|---|
| Your pilot for today’s flight: | 
Steve Shaw, Founder & President When not tearing through financial statements and preaching the virtues of corporate bonds, can be found training for his next triathlon or skiing the icy slopes of the Northeast with his two daughters. |
Affable and handsome, but not a 'bond guy.' Charges 1% and then farms out the hard investment decisions to someone else who charges you more fees. Guaranteed to have a lower golf handicap than you. |
Last seen with the robots that played a key role in the Flash Crash of 2010. Wouldn't know a corporate bond if it hit him in his hard drive. |
| Knowledge of bond investing | High
We have analyzed thousands of bonds and conducted detailed financial analysis on hundreds of companies. We understand how bonds trade online and use all of our knowledge to identify compelling investment opportunities. Corporate bond investing is all we do |
Low
Typically focused on managing and building individual client relationships – not involved in evaluating bond investments and often not knowledgeable about bond investing |
None
All bond investing gets allocated to some bond fund or ETF, typically with low returns. |
| Fees | Low
Flat subscription fee + Online broker trading fees |
Highest
1% of assets** + Mutual fund fees + Undisclosed fund trading fees |
High
0.25%-0.50% of assets + Mutual fund fees + Undisclosed fund trading fees |
| Investment selection | Unbiased
We start with all of the bonds available for online investing and make recommendations 100% on the merits of the bond investment opportunities. |
Often Biased
Many advisors are often incentivized to sell certain products over others. If you buy individual bonds, those bonds often come from the inventory of the advisor’s firm, meaning that you did not see all of the bonds available for sale and don’t enjoy the competitive market provided by buying bonds online. |
Follow the Herd
Typically bond index funds with weak investment returns |
| Return Potential | Highest
Our fixed income strategy seeks to maximize total returns over the life of each recommendation. See how our corporate bond returns compare to leading bond ETFs. |
Lowest
If advisor prescribes bond index funds, his return is often higher than yours after you pay his 1% annual fee, bond fund fees, and bond fund trading fees |
Low
Relegated to low bond index fund returns |
** Financial advisors charge either a percentage of the client’s assets or brokerage commissions. The typical brokerage commission is 2 points, or $20 per bond, compared to 0.1 points or $1 per bond when investors buy bonds online.
Robot photo by: Rock'n Roll Monkey on Unsplash