I need investment help. Should I consider a robo-advisor?

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Q. I don’t think I have enough money to work with a financial advisor and my brokerage account offers a robo-investing thing, where I tell it my goals, etc. and it chooses my investments. Should I do that for the brokerage and the IRA? I basically have everything in index funds now and I always wonder if I can do better if I react more to the news.
— Investor

A. We’re glad you’re paying attention to where your money is invested.

Deciding to get help — an objective opinion — is always recommended.

To your concerns, it’s not the amount of money that is needed to work with a financial advisor that should matter to you, said Bill Connington of Connington Wealth Management in Paramus.

What’s most important is looking at your financial goals and concerns and coming up with a plan to reach them, he said.

“Robo investing can help to determine your allocations but what does that do for the rest of your financial issues?” he said.

Connington said there’s a lot more you need to consider, such as how much you should have in cash as an emergency fund in case you ever lose your job, what your needs might be for disability and life insurance and how you are going to achieve retirement, including using your retirement dollars to last you a lifetime. Also, you need to plan to protect your assets should you ever need long-term care, he said.

“Working with a financial advisor will help you to discuss and come to terms with what you need to do on a regular basis to achieve your financial goals,” he said. “No robo investing is going to tell you that.”

You should consider working with a fee-only planner to start. This person will help you set your goals and come up with a plan to reach them. If you want to consider having an advisor manage your investments for you, you can discuss how the advisor will be paid. Some will take commissions on the investments you buy, while others will take a set fee, such as 1% of your assets, so they’re paid more if your investments earn more.

Learn more about how to choose a financial advisor with the National Association of Personal Financial Advisors and the Financial Planning Association.

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This story was originally published in May 2024.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.