'I don't want to have to tell Claude or ChatGPT that my wife just died'
Robo advisers are getting smarter as AI capabilities increase - but how much control are investors willing to hand over?
Eric Smith, a military veteran from Shakopee, Minn., who loves to travel, is interested in investing - but he doesn't want to spend his retirement "screwing around" with numbers or trying to time the market.
While he's on the go, he entrusts a Charles Schwab $(SCHW)$ robo adviser with his Roth IRA. He chose to invest 70% in stocks and 30% in bonds, but he hasn't made any more decisions beyond that. Behind the scenes, an algorithm equipped with expertise from Schwab advisers is monitoring and automatically rebalancing his portfolio when needed.
"It's fun to play stocks, but really that's not in my wheelhouse," Smith said. "Robo investing just made sense to me."
Smith is among the 28% of Americans who prefer a robo-adviser investment strategy, according to consulting and market-intelligence firm Fortune Business Insights. By 2034, the robo-adviser industry's market size is expected to swell more than sevenfold, to $102 billion. And as the artificial-intelligence industry grows, a new wave of agentic AI investing platforms is emerging that automates active, autonomous trading decisions.
For everyday investors, this shifts the question from whether to automate their investing, to how much control they are willing to hand over to an algorithm.
The pros and cons of traditional robo advisers vs. agentic AI
For retail investors, traditional robo advisers offer a massive pro: They are highly cost-effective, simple to use and handle things like basic asset allocation and portfolio rebalancing.
Their main con is their limitations. You can easily outgrow a robo adviser as your financial life gets more complex. Robo advisers can't handle nuanced financial planning, like tax-optimization strategies, estate planning or updating wills.
"I think robo advisers are a great way to bridge the gap between DIY and having a traditional adviser," said Jeff Judge, a managing partner at Maryland-based Chesapeake Financial Planners. However, "once you get to a certain point, you traditionally will outgrow a robo adviser."
Newer, agentic AI platforms flip this on its head. The pro of agentic AI is its ability to handle highly complex, active trading without a user's involvement. Instead of just buying a basket of broad index funds and making tweaks here and there, these autonomous systems can actively research the market, pick individual stocks and make quick, hyperspecific trading decisions on your behalf.
But financial advisers warn that relying too much on AI agents can lead to overtrading. This can generate heavy short-term capital-gains taxes that can wipe out any extra returns. These platforms also lack a fiduciary duty to act in your best interest, and sometimes charge operational and brokerage fees.
"Traditional robo advisers automate the boring stuff: allocation, rebalancing, tax-loss harvesting," said Matt Chancey, a certified financial planner and founder of Tax Alpha Companies in Florida. "Agentic AI trading automates the active, complex work, multistep trades, strategy switching, custom position sizing. That's not automating discipline; that's automating action. Not the same thing."
Some AI agents offer a more holistic approach
One AI company, Era, designs its investing tools to watch out for overtrading and heavy tax bills. The platform, which links your financial accounts directly to the chatbot of your choice, is designed for autonomous trading, but it also considers the user's other assets and personal goals for a more holistic approach, according to co-founder and CEO Alex Norcliffe.
For Norcliffe, the ultimate goal is to build deep, hands-off trust. "For us, the sweet spot is ... the customer gets comfy enough that even if they don't check it, it's being handled for them just like if they use a human financial adviser," Norcliffe said.
Human advisers argue that no matter how seamlessly a platform connects to a chatbot, an AI agent cannot replicate the personal relationships, nuance and emotional intelligence of a human, especially during times of hardship.
"I don't want to have to tell Claude or ChatGPT that my wife just died, and [ask] how do I process this and do the paperwork and get the money and transfer the accounts," Judge said. "Do I really want to type that type of thing into a computer for that? No."
'I don't want to have to tell Claude or ChatGPT that my wife just died.'Jeff Judge, managing partner, Chesapeake Financial Planners
Back in Minnesota, Smith is content to let Schwab's algorithms handle his Roth IRA while he travels. He remains skeptical of the broader AI hype, but is pragmatic about its rise.
"I didn't grow up with AI," Smith said. "[But] AI is here, whether you like it or not, and it's getting bigger and bigger, so you might as well just take advantage of it where you can."
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-Genna Contino
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(END) Dow Jones Newswires
July 14, 2026 08:00 ET (12:00 GMT)
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