Robo-advisors​ have made a big splash on the wealth management scene and pose stiff competition for traditional financial advisors. These platforms offer streamlined portfolio management with fewer fees, making them attractive to investors who are comfortable with a more passive approach and with making decisions based on online information and communication.

For women, the question of whether to choose a robo-advisor or a human advisor isn’t always cut-and-dried. Women may have very different investment goals from men, and some may prefer plenty of support when making investment decisions. For example, a study from Prudential found that while only 37% of men felt very well-equipped to make financial decisions, even fewer women (22%) did. 

Those differences make it particularly important for women investors to weigh both sides carefully when choosing between a robo-advisor and traditional wealth management. Here’s a look at the most important pros and cons for women to keep in mind when deciding who should get the management of their assets.

​What Makes Robo-Advisors Attractive to Women Investors

Robo-advisors have a lot of positives, with convenience being foremost. These services analyze your portfolio, as well as your age and overall risk tolerance, and use that information to determine the best asset allocation for you, using a computer algorithm. By taking out the human element, robo-advisors are able to streamline the way your assets are managed, which means less work (and cost) for you. (For more on choosing a robo-advisor, see: The 5 Best Robo-Advisors for Investors in 2016.)

For women who aren’t comfortable discussing their finances with a stranger, that hands-off approach may be appealing. According to a study from Fidelity, 50% of women who use the services of an investment firm have never spoken with a representative there – 17% of them because they simply felt too intimidated to have a serious conversation about their investment strategy and goals. But women’s busy lives, with their multiple roles, are also a factor in their lack of communication. 

In that same study, 33% of women reported that time pressure was a reason for not contacting an advisor. That’s an issue that robo-advisors are particularly well-equipped to deal with. Many of these platforms take the time and hassle out of managing your portfolio by performing certain tasks, such as rebalancing and tax loss harvesting, automatically.

Robo-advisors also address another factor for women investors: less confidence in their investing know-how. In a Merrill Lynch white paper, 55.3% of women said they knew less than the average investor about financial markets and investing in general. Only 27.2% of men agreed with that statement. The fact that robo-advisors use an algorithm that takes into account your investing preferences and risk tolerance may help alleviate any concerns that you don’t know enough about the market. Instead of having to spend hours researching individual investments, you can trust that your portfolio is being guided by expert insight. That can be reassuring for anyone concerned about making the wrong decision with their asset allocation.

The lower cost associated with robo-advisors is another mark in their favor. Depending on which service you choose, annual fees may range anywhere from 0.15% to 0.50%, compared to the 2% to 3% in fees for a traditional human advisor. With some robo-advisors, it’s possible to pay no fees at all up to a certain amount. With Wealthfront, for example, the first $10,000 in assets under management are fee-free. (To learn more about advisory fees, see: Understanding the Fees Charged By Financial Advisors.) 

​Why Women Shouldn’t Discount Traditional Financial Advisors

While there’s a lot to be said for robo-advisors, they do have their flaws. One of the biggest issues is that they don’t routinely take into account specific life changes when determining how you should invest. That can be problematic for women, especially when it comes to things like retirement planning or financial planning after the death of a spouse.  

For example, in a survey from Russell Investments, 57% of Gen X women (aged 32 to 47) and 61% of Silent Generation women (ages 67 to 80 – Baby Boomers seem to have been mystifyingly left out of the report) said they’d need a great deal of support from a financial advisor if their spouse were to pass away. While robo-advisors are able to tailor their investing recommendations to a degree, they’re not as equipped to handle major financial upheavals as a human advisor would, which can be invaluable in certain scenarios. 

That same survey also found that significant numbers of women investors want a deep relationship with their financial advisor. Among Generation X investors, 44% said it was extremely important to know their advisor was actively listening to their concerns while 46% of women in the Silent Generation said the same. The survey also revealed that women in both groups place a high value on personalized service and good communication. Those are two areas where a human investment advisor has the edge over robo-advisors. (See also What Women Want From A Financial Advisor.)

​The Bottom Line

Both robo-advisors and traditional financial advisors offer advantages to female investors but neither is perfect for every woman. The key to choosing the best option lies in understanding your preferred investing style, what level of risk you’re comfortable with and what you need from a financial advisor to feel secure about how your investments are handled. While robo-advisors tend to have lower fees, a human advisor may be worth the added cost for women who prefer one-on-one interaction and a collaborative approach to making investment decisions.