Monday’s market plunge was a test for various digital wealth management platforms on how they would handle a sudden market correction —and they didn’t quite pass with flying colors, Bloomberg writes.
As the S&P 500 Index dropped 4.1% Monday, users weren’t able to log into their accounts on the websites of robo-advice pioneers Wealthfront and Betterment as well as the online brokerages Charles Schwab Corp. and Vanguard Group, which all together managed $150.2 billion as of the end of 2017, according to the news service.
Wealthfront admits in a statement that its clients couldn’t access their accounts, but only for a brief period of time Monday, and that the firm is working on a fix to prevent this sort of outage from happening again, Bloomberg writes.
A Betterment spokesman, meanwhile, tells the news service that the robo’s clients had trouble logging in for around 30 minutes yesterday afternoon, but that account activities such as rebalancing and tax loss harvesting went on uninterrupted. Vanguard’s spokeswoman tells Bloomberg that only “some” of its clients “may have” run into “sporadic difficulty” getting into their accounts online and over the phone. And a Schwab spokeswoman tells the news service its clients had delays logging in for just a few minutes, due to increased demand.
Human financial advisors, meanwhile, are reassuring their clients that there’s no reason to panic, according to CNBC. Despite the Dow Jones briefly dropping more than 1,500 points yesterday afternoon, “nothing has materially changed in the economy,” Ivory Johnson, a certified financial planner and the founder of Delancey Wealth Management, tells the news website.
Diahann Lassus, a certified financial planner and president of Lassus Wherley, says investors need to remind themselves that they’re in the market for the long term and to view the recent market drop as short-term, according to CNBC. Investors need to stick to their plan, and if they’re not feeling sure, they should get on the phone to a financial advisor, Douglas Boneparth, a certified financial planner and president of Bone Fide Wealth, tells the news website.
But the drop also presents an opportunity to rebalance portfolios based on their investors’ asset allocations, Carolyn McClanahan, director of financial planning for Life Planning Partners, tells CNBC. Lower prices could also mean an opportunity to invest in “something that may have run away from you earlier," Johnson tells the news website.