Automated investment advisory services aim to be as easy to deal with as C-3PO, the Star Wars droid famous for his eagerness to help.

Unlike C-3PO, however, robo-advisors can't talk. That means you can't interview them to understand how they approach investing and if their approach is in sync with yours. But you can use some of the same tactics you would with a carbon-based (ie, human) financial advisor: Understand your goals, the scope and limitations of what the digital service offers and how to kick the tires.

"Robo-advisors are to investment advisors what TurboTax is to tax preparers," says Charles Sizemore, founder of Sizemore Capital Management LLC in Dallas."If you have a complex situation, TurboTax won't help you. If you have a complex situation, the more wealth you have, the more tailored an approach you need." Sizemore taps into some automated services for his own clients and advocates consumers take an a la carte approach, using digital advisors for basic investments, such as index funds, and human advisors for more complex decisions.

Most digital advisory services are geared toward millennials, those 20-somethings and 30-somethings for whom retirement planning is simply all about saving, says Adam Nash, CEO of Wealthfront Inc., a digital financial advisory firmbased in Palo Alto, California. "They've grown up with technology, and now they have jobs and have to save and invest," Nash says. Millennials are also accustomed to handling banking, travel arrangements and, of course, online shopping, so most understand the concept and logistics of self-serve financial advisories.

Those just starting out usuallyhave simple, straightforward needs and mainly want to ensure their portfolio growth isn't undermined by high fees. Typically, robo-advisors park money in low-fee funds such as index funds or exchange-traded funds, amplifying potential returns, executives at digital services say.

Preretirees and early retirees face a complex array of decisions, says Karin Risi, head of Vanguard Personal Advisor, based in Malvern, Pennsylvania. "Their needs are greater, and their portfolios are more sophisticated," she says.

One filter you can use: If you complete the long form for your annual income taxreturn, you may need a personal advisor. If you complete the short income tax form, an automated advisor may be sufficient for the time being.

Scope of services.The obvious difference between robo-advisors and humans is that you can't expect a robo-advisor to talk you through a tough stretch when your portfolio is getting hammered. Although robo-advisors can't prevent you from panicking and making a major misstep, such as dumping a mutual fund that's temporarily down, they can offer instant reports that address anxiety in a different way, Nash and executives at other digital advisories say.

For example, Nash says, a human advisor would likely look at your portfolio four times a year, at most, and recommend any rebalancing then. But a well-structured robo-advisor will automatically rebalance your account to reflect current economic and market conditions. That means you may be less worried about reacting to fluctuating markets because you know the robo-advisor is taking care of it, Nash says.

If you suspect you may need afinancial advisor within a few years, you may consider a robo-advisor that can transition you to an advisor within its network.Betterment, for example, is developing a network of financial advisors to work with clients as their needs grow, saysJon Stein, CEO and founder of the New York-based digital advisory.

Vanguard offers personal advisor services for a fee of 0.30 percent. The human advisor starts with the computer-generated plan and then customizes it according to the client's needs.A service that offers a continuum lets you escalate the level of service as you need it, Risi says, precisely when life is complicated by a welter of decisions about children in college, aging parents and career decisions.

If you are, or anticipate, quarterbacking the efforts of an estate lawyer, tax accountant and insurance agent, you may need a full-fledged financial advisor to tie it all together, Risi says. "Even if you have the inclination and aptitude to manage your own investments, you might not have the time," she says.

How to kick the tires.Robo-advisors are designed to detect your investing goals by asking key questions, but no digital advisor can be as thorough as a thoughtful, experienced human advisory, executives at digital advisories say.

You can glean insights into a service's approach by going through the goal-setting exercise most services use as an opener, Sizemore says. Any advisory that quickly spits back investment recommendations based primarily on age is probably not credible, he says. "If it starts with age and doesn't get more nuanced, that's a terrible way to do things, for lack of more creative options," he says. "Age, income and net worth are the quantitative factors that matter most."

About 25 percent of new customers call Betterment's customer service line in their first week of signing up, Stein says, usually to make sure they understand some of technicalities of setting up their account. Sizemore recommends calling just to see how well the service staff responds to your questions. "If you hate calling customer service centers in general, you want to make sure you are satisfied with the robo-advisor's support before you get very far into the relationship," he says.

Other red flags:

  • A quiz or diagnostic that flat-out asks you what your risk tolerance is wont be an effective test.Most people think they have stronger stomachs than they do, Sizemore says. Look for questions that put risk tolerance in terms of your likely emotional reaction to various scenarios.
  • Does the system clearly outline what you must do to transfer to a different advisor? It should be a simple, straightforward explanation that is easy to find on the site.

Part of the appeal of digital services is that they can link to your other financial accounts, but you can't see how well that works unless you set everything up in a full-fledged account. That full-fledged account is more difficult to dismantle, however, if you then want to try another service,executivesof digital advisory firmsconcede.

An alternative is to sign up for the lowest level of service with the minimum amount of money and see how it goes, Nash says. Moving a $10,000 trial account around is easier than transplanting your entire investing life just to experiment with various services, executives say. Then when you find the Goldilocks service, the one that's just right, you can settle in for the long haul.



NEW YORK, Jan 9 (Reuters) - Chicago-based independent wealth management firm HighTower Advisors has made its first hire of 2015 a substantial one, adding two UBS Wealth Management brokers who managed $550 million in assets.

Emmett Towey, 45, and Michael Cantore III, 38, joined HighTower from UBS on Jan. 2, after spending 18 months studying the business through the eyes of Emmett Toweys brother, Justin Towey.

Justin Towey joined HighTower in 2010, also from UBS, a HighTower spokeswoman confirmed. HighTower announced Cantore and Toweys move earlier this week.

Cantore said he and Towey, colleagues for over 17 years, made the switch because they wanted more independence and did not want to make selling financial products a major focus of their work.

We can purely focus on advice and solutions, rather than having to think about product the way that often happens inside the wire houses, Cantore said.

UBS, along with Morgan Stanley, Wells Fargo Advisors , and Bank of Americas Merrill Lynch, are the four largest US brokerages and are referred to in industry parlance as the wire houses.

HighTower said it landed 13 groups of advisers in 2014. They included at least 23 brokers who managed $3 billion in assets, according to Reuters coverage of some of those hires.

As HighTower does not publicly announce all new hires, the actual number of brokers and assets included in the 13 groups is likely higher.

HighTower currently has more than 40 firms affiliated with it through its Partnership division, through which it buys advisers practices and gives them equity.

It also has five financial advisory groups on its Network channel, which allows firms to use HighTowers platform and technology but maintain independent ownership over their business. (Reporting by Elizabeth Dilts; Editing by Peter Galloway)



Princeton-based financial advisory firm Biltmore Capital Advisors announced Friday that Dr. Donald R. Chambers has joined the firm as chief investment officer.

Chambers is an expert on finance and economics in private enterprise and academia, according to a news release.

We are thrilled to have Dr. Chambers, a prominent expert, professor and author of numerous books about investing, financial economics, and alternative investments join Biltmore Capital, said Tyler Vernon, Biltmores Chief Executive Officer. Throughout his career he has had tremendous success in academia as well as private enterprise, setting a name for himself in the industry.

Dr. Chambers shares our view that, similar to the philosophies of Yale, Harvard, and Princeton endowments, alternative investments are vital to long term financial success within a diversified portfolio, Vernon continued. It was important that Dr. Chambers believe in that approach, as our investment team utilizes the same types of investment and risk management strategies in our clients investment portfolios.

Prior to Biltmore Capital, Chambers was the associate director of programs at the Massachusetts-based Chartered Alternative Investment Association, director of equities and director of alternative investments at New York-based Karpus Investment Management, and was a risk management consultant for The Bank of New York.

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On December 8, 2014, the Fund announced that its Board of Trustees approved a managed distribution policy for the Fund (the "Plan") in reliance on exemptive relief received from the Securities and Exchange Commission which permits the Fund to make periodic distributions of long-term capital gains as frequently as monthly each tax year. Under the Plan, the Fund intends to continue to pay its recurring monthly distribution in the amount of $0.11 per share that reflects the distributable cash flow of the Fund. A portion of this monthly distribution may include realized capital gains. This may result in a reduction of the long-term capital gain distribution necessary at year end by distributing realized capital gains throughout the year. The annual distribution rate is independent of the Fund's performance during any particular period but is expected to correlate with the Fund's performance over time. Accordingly, you should not draw any conclusions about the Fund's investment performance from the amount of any distribution or from the terms of the Plan.

The Fund is a non-diversified, closed-end management investment company that seeks to provide a high level of total return with an emphasis on current distributions paid to shareholders. The Fund seeks to achieve its investment objectives by investing primarily in securities of companies engaged in the energy infrastructure sector. These companies principally include publicly-traded MLPs and limited liability companies taxed as partnerships, MLP affiliates, Canadian income trusts and their successor companies, pipeline companies, utilities, and other companies that derive at least 50% of their revenues from operating or providing services in support of infrastructure assets such as pipelines, power transmission and petroleum and natural gas storage in the petroleum, natural gas and power generation industries. To generate additional income, the Fund expects to write (or sell) covered call options.

First Trust Advisors LP, the Fund's investment advisor, along with its affiliate, First Trust Portfolios LP, are privately-held companies which provide a variety of investment services, including asset management and financial advisory services, with collective assets under management or supervision of approximately $105 billion as of November 30, 2014, through unit investment trusts, exchange-traded funds, closed-end funds, mutual funds and separate managed accounts.

Energy Income Partners, LLC ("EIP") serves as the Fund's investment sub-advisor and provides advisory services to a number of investment companies and partnerships for the purpose of investing in MLPs and other energy infrastructure securities. EIP is one of the early investment advisors specializing in this area. As of November 30, 2014, EIP managed or supervised approximately $5.9 billion in client assets.

Past performance is no assurance of future results. Investment return and market value of an investment in the Fund will fluctuate. Shares, when sold, may be worth more or less than their original cost.

Principal Risk Factors: Investment in this Fund involves investment and market risk, market discount from net asset value risk, management risk, potential conflicts of interest risk, investment concentration risk, industry specific risk, cash flow risk, MLP tax risk, non-US securities risk, failure to qualify as a regulated investment company risk, tax law change risk, deferred tax risk, delay in investing the proceeds risk, equity securities risk, Canadian income equities risk, leverage risk, derivatives risk, portfolio turnover risk, competition risk, restricted securities risk, liquidity risk, valuation risk, interest rate risk, non-diversification risk, anti-takeover provisions, inflation risk, certain affiliations and secondary market for the Fund's common shares. The risks of investing in the Fund are spelled out in the shareholder reports and other regulatory filings.

The Fund's daily closing New York Stock Exchange price and net asset value per share as well as other information can be found at www.ftportfolios.com or by calling 1-800-988-5891.

First Trust Energy Infrastructure Fund

Press Inquiries:

Jane Doyle, 630-765-8775

Analyst Inquiries:

Jeff Margolin, 630-915-6784

Broker Inquiries:

Jeff Margolin, 630-915-6784


Source: First Trust Energy Infrastructure Fund