Rating the Robos

Could automated advice be the right answer for portfolio ‘succession planning’? [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_improvingfinances&utm_content=35520&elqTrackId=c8357006ff1742368a428b00ba6c7de3&elq=8b35a0b7940a4564b8dce31d958d52bb&elqaid=35520&elqat=1&elqCampaignId=16546) [Improving Your Finances] Improving Your Finances with [Christine Benz]( [Christine Benz] Morningstar.com is frequented by many avid DIY investors. But many such self-directed investors are quite reasonably concerned about “[succession planning]( for their financial plans. Who will take over portfolio management if they’re unable to do it someday, or if they simply decide they’d rather spend their time volunteering, playing bocce ball, or perfecting their Tiramisu? Some of these investors have asked me over the years whether using a robo-advisor—an automated financial advice solution--to manage their investments could be an economical answer. And my answer has always been tentative. Because I hadn’t spent time delving into the robo universe or used such a service myself, I didn’t feel equipped to give robos an unequivocal thumbs up or thumbs down. Now I do. Thanks to [an exhaustive effort]( led by my colleague Amy Arnott and a team of our manager research analysts, Morningstar has shed some much-needed light on the robo space. The first stop? Assessing [whether a robo makes sense in your situation]( factoring in the amount of assets you have to invest and the complexity of your situation, among other factors. If you decide that the robo model is a fit, you can check out [our review of the largest robo-advisors]( taking into account costs, features like tax-loss harvesting, quality and structure of the investment lineup, and so on. Spoiler alert: Vanguard’s Digital Advisor/Personal Advisor Services came out on top this year, but Fidelity and Betterment were close contenders. Elsewhere on the site this week, our team continues to pay close attention to the inflation situation and its implications for your portfolio and financial plan. If you’re retired and drawing from your portfolio, higher prices could force a higher withdrawal rate than you might be comfortable with. I explored the interplay between inflation and withdrawal rates in [this article]( and I’d also recommend [John Rekenthaler’s discussion of the topic](. John asserts that “sequence of inflation”—when inflation occurs in your retirement—may be just as important as the oft-discussed sequence of returns. Finally, for some easy listening (or reading), I’d recommend [the interview that Jeff Ptak and I did with author and blogger JL Collins](. I frequent a lot of websites geared toward simple, low-cost investing (Bogleheads and Humble Dollar, to name a few), and JL’s name kept coming up. If your investing mantra is “cut the clutter,” I think you’ll like what he has to say. With warm regards from chilly Chicago, Christine Benz [JL Collins: The Case for Simplicity]( The author and financial blogger discusses why less is more in investing and his controversial take that homeownership often doesn't add up financially. [Read More]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] [Your Financial To-Do List for April 2022]( Now's the time to get your financial documents in order. Here's how. [Read More]( [What You Need to Know About 401(k) Rollovers]( Streamlining your retirement accounts? Think through the key variables first. [Read More]( [When Higher Inflation Meets Your Withdrawal Rate]( While few are predicting a 1970s-style inflation spiral, it’s still worth thinking through how inflation could affect your plan. [Read More]( [Should You Be Using a Robo-Advisor?]( These seven questions can help you decide if robo-advice is right for you. [Read More]( Listen Now Get the latest investing insights and market updates with [Morningstar’s podcasts]( available on your iPhone, iPad, Android, PC, or smart speaker. Stay connected: [twitter]( [facebook]( [linkedin]( [instagram]( [YouTube]( [Apple News]( [View online]( | [See all newsletters]( | [Share your feedback]( [Unsubscribe]( from this newsletter. Or update your [email preferences](. © 2022 Morningstar, Inc. All Rights Reserved. 22 W. Washington St. Chicago, IL 60602