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I just read about an online advice firm. Are these firms safe to invest my money with?
-Curious in CT


They’re likely to be no more or less safe in terms of honesty and integrity than firms that have brick-and-mortar offices. American financial advisers are monitored by the Financial Industry Regulatory Authority, an independent organization that’s authorized by Congress but not part of the government. If you want to find out if an adviser is on the up-and-up, go to Finra’s website,, and enter the name of a firm or individual adviser in the field at the upper right part of the homepage – where it says “Check the background of an investment professional” – and see what comes up.
A so-called robo-adviser could provide more safety than a human counterpart in one way. Online firms offer no-frills investment management services, so portfolios tend to be plain vanilla and therefore less likely to substantially beat or lag whatever their market benchmarks are than portfolios assembled by living, breathing advisers. Less variability often means less risk. And because human advisers are subject to human frailty, a robo-adviser is far less likely to buy assets at a market top and sell at a bottom, although you, being human, too, have to be careful not to do that yourself. Online advisory services ultimately may not be for you, especially if you prefer interpersonal contact and/or have financial affairs that require more than a simple, bare-bones service, but safety shouldn’t be a concern as long as you’ve done a bit of homework and know who or what you’re doing business with.

-Conrad de Aenlle