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Market volatility has caused many to voice their concerns with robo advisors. For the most part all retail investors were hurt by the recent correction in the market, but clients of robo advisors are extra nervous because they don't have anyone to talk to.
“The current market conditions will present challenges to the robo-advisors,” said Joel Bruckenstein, a consultant and publisher of Technology Tools for Today, in an email. One challenge is, “What happens if clients of these robos panic and want to talk to someone?” Even traditional broker-dealers have even been overwhelmed by the large trading volumes. Both TD Ameritrade Inc. and Scottrade, for example, said on Twitter that they were having delays due to the high trading volume and market volatility. Without behavioral coaching from advisers, clients would be tempted to make rash decisions or jump into conservative investments at the wrong time, said Aaron Klein, co-founder of Riskalyze, which offers tools for investors to gauge risk tolerance.
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