{"id":149,"date":"2015-07-31T02:37:25","date_gmt":"2015-07-31T07:37:25","guid":{"rendered":"http:\/\/rixtrema.com\/blog\/?p=149"},"modified":"2018-01-10T12:24:40","modified_gmt":"2018-01-10T17:24:40","slug":"when-black-swans-meet-robo-advisors","status":"publish","type":"post","link":"https:\/\/rixtrema.com\/blog\/when-black-swans-meet-robo-advisors\/","title":{"rendered":"When Black Swans Meet Robo-Advisors"},"content":{"rendered":"

According to the recent 2014 Scottrade Advisor Survey, financial advisors are well aware of the robo-threat to their business. However, when asked about the potential problems with online portfolio management platforms, virtually all RIAs focus on the lack of human interaction as the main weakness: 80% of advisors say robos\u2019 biggest weakness is \u201cLack of Human Interaction\u201d and 46% say that \u201cLack of Service\u201d which can be considered the same human interaction element.<\/p>\n

However, there is one major robo\u2019s weakness that is not revealed in that study. Robo-advisors were all founded in 2009 or later and they have never seen a meaningful downturn in the financial markets. Yet, their algorithms are based on the mean-variance methodologies that were in place on risk platforms prior to the last downturn in 2008. These methodologies are highly susceptible to the market shocks.<\/p>\n

A thorough overview of the nature of this weakness and how it may be dangerous is provided in RiXtrema\u2019s article \u201cWhen Black Swans Meet Robos\u201d published in Financial Planning magazine. Read the full article here: http:\/\/www.financial-planning.com\/blogs\/when-black-swans-meet-robos-2693655-1.html<\/a><\/p>\n

\"Stock<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

According to the recent 2014 Scottrade Advisor Survey, financial advisors are well aware of the robo-threat to their business. However, when asked about the potential problems with online portfolio management platforms, virtually all RIAs focus on the lack of human interaction as the main weakness: 80% of advisors say robos\u2019 biggest weakness is \u201cLack of… <\/p>\n

<\/div>\n

Read More<\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[129,12,130,128,95,93,126,127],"class_list":["post-149","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-finance","tag-financial-advisors","tag-financial-markets","tag-financial-risk","tag-investing","tag-risk","tag-robo-advisors","tag-robots"],"jetpack_featured_media_url":"","yoast_head":"\nWhen Black Swans Meet Robo-Advisors<\/title>\n<link rel=\"canonical\" href=\"https:\/\/rixtrema.com\/blog\/when-black-swans-meet-robo-advisors\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"When Black Swans Meet Robo-Advisors\" \/>\n<meta property=\"og:description\" content=\"According to the recent 2014 Scottrade Advisor Survey, financial advisors are well aware of the robo-threat to their business. However, when asked about the potential problems with online portfolio management platforms, virtually all RIAs focus on the lack of human interaction as the main weakness: 80% of advisors say robos\u2019 biggest weakness is \u201cLack of... Read More\" \/>\n<meta property=\"og:url\" content=\"https:\/\/rixtrema.com\/blog\/when-black-swans-meet-robo-advisors\/\" \/>\n<meta property=\"og:site_name\" content=\"RiXtrema.com\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/LarkspurRiXtrema\/\" \/>\n<meta property=\"article:published_time\" content=\"2015-07-31T07:37:25+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2018-01-10T17:24:40+00:00\" \/>\n<meta property=\"og:image\" content=\"http:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2015\/07\/black_swan-300x199.jpg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@RiXtrema\" \/>\n<meta name=\"twitter:site\" content=\"@RiXtrema\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\">\n\t<meta name=\"twitter:data1\" content=\"1 minute\">\n<!-- \/ Yoast SEO Premium plugin. -->","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/posts\/149","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/comments?post=149"}],"version-history":[{"count":2,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/posts\/149\/revisions"}],"predecessor-version":[{"id":153,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/posts\/149\/revisions\/153"}],"wp:attachment":[{"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/media?parent=149"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/categories?post=149"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rixtrema.com\/blog\/wp-json\/wp\/v2\/tags?post=149"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}