Although I'm inclined to be self directed, I am intrigued by the robo-advisor's ability to do continual rebalancing and auto-tax loss harvesting that in theory can increase returns. That said, I am mostly curious why all advisement services continue to offer their services on a percentage of portfolio value basis?
Legacy full service advisors seem to charge around 1% per year and the new robo-advisor products around .3%; but, why should somebody who has $500k pay 1/3 of the amount of somebody who has $1.5M, especially with the new computer run advisement where there doesn't seem to be any additional work required to manage a portfolio irrespective of its total value? . Is there some rational logic to this method of billing or is it just a leftover from the legacy model?
I would think somebody would just charge a fixed amount per year or month..