Wednesday, Jul 26th

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Technology can lull millennials into a false sense of security

New online tools and so-called “robo-advisors” flooding the market can provide investors, especially tech-savvy millennials, with valuable information, but also create a false sense of security. Online investment simulators can make growing a modest portfolio by $100,000 look quick and easy, leading younger investors to risk real money after winning what amounts to a math video game.

“It’s like [World Poker Tournament online] players who say, ‘Oh, I’m so good,’ until you go to the casino and play,” said Ronald Blau, CEO of Blau Financial Services. Blau Financial Services, based in Phoenix, Ariz., offers life, health, long-term care, and disability insurance, along with retirement planning, and has been in business for 20 years. The firm minimum to invest is $100,000, Blau said. 

There’s an upside to millennials learning money management the hard way at their age, and it’s that they have time to change course, Blau told The Suit Magazine in a recent interview.
“Maybe then they’ll be a little more conservative and more interested in talking to a professional, because they won’t think the computer knows it all,” he said.

Blau describes his blunt talk as among his greatest successes, and simplistic explanations for clients as his “greatest virtue.” Clients can expect to have nothing sugar-coated at Blau Financial Services, and instead will find a firm working to build solutions in line with their risk tolerance after thorough questioning.

“Cut to the chase, tell them exactly what it is. Clients either respond to that or go away,” said Blau, a former mechanical engineer for Boeing who had nine parts in Skylab—the 1980s-era space station—to his name.

And behind the tough talk is a fiduciary firm that puts clients first. Blau offers several dozen insurance products, and describes the commission rates as something he doesn’t know or care about. Instead, he chooses whichever product works best for the client.

“I have yet to do anything in my best interest,” he said. “Fiduciary is something all agents and representatives should have been doing since the day they got their license, whatever license they have.”

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