During a conversation with a friend the other day, she mentioned that she has two types of money: frivolity fund and serious savings. The excess money she earns every month is her frivolity fund, to be spent on things that she likes the look of, once the important things like her mortgage and food shopping have been paid. The cash in her savings though, is serious savings; it’s there for a purpose and it can’t be spent on expensive frivolities, no matter how badly she wants them. Her main problem is that she doesn’t really know what her serious savings are for.
Robo-advice is a relatively new development in financial advice. You might have seen online adverts; they pop up now and again (usually on certain social media sites) often offering a cheap and easy way to build an investment portfolio and meet your financial goals. The attraction is a fast, cheap advice process that can be completed from the comfort of your own home. In the past robo-advice has been billed as the future of financial advice, and a threat to the traditional advice process.
There’s a commonly held belief that financial advice is only for older people – because they’ve accumulated sufficient wealth to make seeking advice a sensible move and they also start to worry about their income in retirement. Many people in their 20s and 30s have a very limited interest in financial advice, because they either don’t have surplus income or spend it all – and matters like retirement planning seem like a lifetime away.