Robo Advisors explained

Robo Advisors explained

“There is a lot written in the media about Robo Advisers, and they are definitely here to stay.”

BY Caroline Bell, 7 min READ

Women have made a huge amount of progress when it comes to equality – but despite this gap – an uncomfortable truth remains – there is still a gender wealth gap.

One of the contributing factors to this is not only women earning on average less than men, but women then also investing less than men, which compounds the problem. The average superannuation payment for women is around one-third of that for men[1]. And although the numbers are slowly improving over time, the average net wealth (assets less debts) per capita of women in Australia in March 2019 was $400,000, still only 89% of the male average of $449,000[2].

We don’t necessarily all have a lot of control over what we get paid – but we do have control over whether we invest or not.

How can technology help?

I have been a financial adviser for nearly 30 years and I understand that seeing a financial adviser can be overwhelming, too much work or just too expensive. Also, women as investors generally want to understand what they are doing before starting – but finding the time and wading through the huge amount of information and varying opinions about how to invest is also too much. And so, starting to invest goes into the ‘too hard basket’.

I have seen this problem over a number of years, and in different countries. So, I wanted to find a way to overcome this. How to make starting to invest more accessible and more affordable so women can easily get started to have more control and confidence with their financial future – and especially have comfort that they are making the most of their money.

There is a lot written in the media about Robo Advisers, and they are definitely here to stay. A Robo Adviser is just a technology platform – generally consisting of a range of index Exchange Traded Fund (ETF) portfolios, with the appropriate portfolio selected for you based on your responses to a series of questions. These questions are designed to get an understanding of your personal attitude towards risk. In other words, the goal is to find the appropriate mix of investments so you aren’t waking up at 2am, worried about your investment portfolio. The ultimate goal for all of our clients is having the ‘sleep at night’ factor. If you are waking up at 2am worried about how you are invested, you aren’t invested in the most appropriate way for you.

Adding the personal connection

But women especially want more than just a login and password before investing. Women are confident and longer term investors, especially when supported with knowledge and education. Financial literacy continues to be an issue in schools today, and is definitely one of the hurdles to overcome when women are trying to achieve a level of financial confidence.

Asking someone to invest online in a Robo Advisor without any human contact can be just too much – and especially for new investors. This is a very personal and important topic – we’re working with savings that someone has often worked incredibly hard to build. Whether it’s money that has been saved over a lifetime of working or their first savings after joining the workforce – we need to remember how important this is to each individual.

To help overcome these initial concerns and for many, anxiety, providing access to an adviser gives you the ability to ask questions, and helps build confidence about dealing with real people behind the technology solution.

For others – offering financial advice, but in a limited form to answer their specific questions or help formulate goals is all that is needed. A paid advice session is sometimes all someone needs, especially when solving one or two issues or questions rather than designing a full strategy, and therefore can be offered on a much more cost effective basis.

What about superannuation?

I consider your investment portfolio to be managed in addition to your superannuation – they both have a purpose and contribute to your overall wealth and help reduce the gender wealth gap. Our goal is not to replace superannuation, but to complement it.

Where to now?

So where to from here? The three key steps are:

  1. Know ‘why’ you want to invest. You will be a more successful investor, if you are clear as to what the reason is. Whether it is saving for a home, or building wealth for financial independence – be clear what is important to you.
  2. Get educated. Feel free to join the Summerhill Invest Facebook Community. Members do not have to be clients to join (but the group is closed to ensure members’ privacy) but we post regularly with information about money and investing, as well as answering member’s general questions. Again – we are using technology to reach and connect with more people on a personal level, with the goal of helping our members build their knowledge and confidence about money and investing.
  3. Know how much you want to start investing with – and just do it. There is never the ‘right’ time to start investing – there is only knowing that the sooner you start, the sooner you start to feel more in control of your money.



Caroline Bell is a Business Chicks Premium member, Certified Financial Planner and Founder of Summerhill Invest. Caroline is motivated by creating order out of chaos and seeing tangible results for her clients. You can contact Summerhill Invest today for a free 15 minute chat about using Robo Advisor technology.


[1] https://humanrights.gov.au/our-work/gender-gap-retirement-savings

[2] http://www.roymorgan.com/findings/8072-females-closing-the-gender-wealth-gap-201908050003


©2020 Business Chicks

Log in

Forgot your password?