We recently received an enquiry, and one of the questions was, “How can you call an Excel sheet a robo-advisor?” This is not the first time we have encountered this criticism.
Many young earners have claimed that the freefincal robo advisor is “just” an Excel sheet with “macros” and it is not really a robo advisor.
First, what is a robo-advisor? Any set-up that provides financial planning recommendations automatically based on an algorithm is a robo-advisor. That is it. This can be happily implemented on an Excel sheet. There is no need for a fancy website with fancy back-end calculations to be labelled as a robo-advisor.
The freefincal robo advisor has minimal dependence on macros. Only the goal-seek algorithm is implemented via macros. Its USPs are
- An automated asset allocation schedule helps users effectively manage the sequence of returns risk, based on our extensive research, which is available in our goal-based portfolio management course.
- A unique bucket strategy for retirement planning that minimises the risk of outliving the corpus. Users can opt to use a decreasing equity exposure bucket strategy (glide-path) to reduce sequence of returns risk and churn (buckets can be sequentially converted to income)
- There is also a custom DIY bucket strategy module.
- Ability to handle an integrated/unified portfolio (one portfolio for all goals)
- Ability to handle three income streams after retirement
- Ability to handle financial goals after retirement (eg, kids’ education after you retire early)
- Ability to incorporate an income floor or laddered annuities to further reduce the risk of outliving the corpus and handle the lack of health risk after retirement.
All its algorithms are open-source. Users can freely modify all settings in a private environment (Excel sheet or Google sheet). How many robo advisors out there can claim this or offer all the above features at a price that has barely changed since 2018?
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If we had taken the Robo advisor to the “cloud” (we had many offers of “collaboration” to do so), we would have lost our open-source, fully customisable, and fully private cire identity.
Just because the freefincal robo advisor is not based on Python or React.js does not make it primitive! We continue to develop it, considering user requirements, and push those updates to existing users without extra cost.
What is so bad about having a private, customisable Swiss army knife that keeps adding tools?
For more details and a video guide about the tool, see: Robo Advisory Software Tool: Build a complete financial plan!
For more Q/A, see: Get started with the Freefincal Robo Advisor Tool: FAQs answered.