Technology has permeated every aspect of our lives, largely enhancing the efficiency and accessibility of financial planning. Online tools make it easier for everyone to search for unfamiliar terms and ideas, get advice on financial planning, and even keep track of investments, budgets, and long-term financial plans.
Ease of Use
While traditional software spreadsheets provide formulas and a platform to keep track of your budget and investments, the software can be challenging to use, especially for people who do not use spreadsheets regularly. If you did not know the relevant shortcuts and formulas, spreadsheets only provided an organized way to keep track of your data.
Online technology tools can automatically update your spreadsheets and provide real-time financial insights into your saving and spending habits. Online budgeting tools can help you create a budget and track expenditures in predetermined categories. You can even color code your expenditure and create graphs and charts to make it easier to see your progress.
Using an online spreadsheet, you can track your investment and account balances and your net worth over time. Some programs integrate with credit cards and banking tools to provide a more comprehensive financial overview. These insights can make it easier to diversify your portfolio and determine which investments are best meeting your financial goals.
Artificial Intelligence
Robo-advisors and generative artificial intelligence (AI) technologies use algorithms to offer personalized answers to your financial questions. You can input complex questions based on your financial goals and risk tolerance, and AI advisors will instantly spit out suggested answers to your questions. Unlike humans, AI advisors have unlimited time and patience to ensure you fully understand your investment options.
Robo-advisors are available anytime, day or night. They are typically free to use or have a very low associated cost. Online technology makes it possible for people with smaller investment portfolios to access the same information as people with larger ones.
Technology Risks
While the pros of using technology for financial planning are innumerable, there are some significant drawbacks. The financial sector is a primary target for thieves and cybercriminals, as they target and sell your financial and personal information.
Before using online technology to support your financial planning, consider your planning needs. For example, if you only need software to develop a budget, choose one that budgets well and provides security and training on how to use the software to develop a budget. The more technological options available that are unused or unnecessary, the more likely cybercriminals will have access to your personal information.
While technologically-based financial planning solutions can help you plan, it is essential to check and ask questions and fully understand how the technology company plans to protect your data.
Financial Planners
Financial advisors use technology to increase their efficiency and accuracy, maximizing advising time and minimizing costs. This allows financial planners to focus more on strategy when providing financial advice instead of the minutiae of budgeting and investment planning.
Technology with human oversight is the best of both worlds. It can minimize costs while improving efficiency, accuracy, and accessibility. Financial advisors can use technology tools to provide more detailed and individualized information and data analysis than they could when only manual tools were available.
But, unlike technology, human financial advisors can use experience, relationship building, and strategizing to help ensure you are getting the best financial advice for your individual situation. They can use their expertise to detect subtle signs of fraudulent activity or ethical issues with technology advice.
Financial planning can be stressful and emotionally charged. Only a human financial advisor understands this and can provide an intuitive, empathetic approach to developing a long-term financial plan. Financial advice by a certified financial planner paired with available technology can provide the best financial planning experience.
Use technology for automatic bill paying, direct deposits, budgeting, and investment tracking, and talk to a Frame Wealth Management financial advisor to develop a personalized financial plan that meets your goals and objectives.
Give us a call today at 866-395-1786 or contact us online to schedule a meeting and discuss your unique financial needs. Let us be your trusted partner on the path to financial success.
