** Special to the Just Word Blog from Robin Powell, the UK based editor of The Evidence-Based Investor and consultant to investors, planners & advisors **
Your robo-advisor can rebalance at 3am and harvest tax losses while you sleep. It can’t pick up the phone when you’re about to panic-sell. Combining algorithmic precision with human advisors is what keeps you invested. That’s the hybrid model Justwealth offers.
You know what a gym membership gets you. Equipment that’s precise, consistent, available round the clock. Machines that don’t have bad days. Perfect execution, every time.
What the equipment can’t do is make you show up.
Most people who buy memberships stop going within months. The machines are flawless. The human using them isn’t. That’s the personal trainer’s job — not to be stronger than the leg press, but to be there on the cold Tuesday morning when you’d rather stay at home.
Your robo-advisor has the same problem. It monitors markets around the clock, rebalances automatically, executes without hesitation. But you’re still the one who has to not touch anything when your portfolio drops 30%.
You’ve felt it. That physical urge to do something when markets fall. The finger hovering over the sell button.
You’re not weak for feeling this. You’re wired this way. Evolution programmed you to flee danger. The problem is that fleeing a market downturn usually means locking in your losses.
And you’re far from alone. According to DALBAR, the average equity investor earned 16.54% in 2024, while the market returned over 25%. That gap is almost entirely self-inflicted.
The good news: there’s a way to keep the algorithm’s precision while adding something it fundamentally lacks. Hybrid platforms like Justwealth pair automated portfolio management with dedicated human advisors — combining algorithmic efficiency with someone who’ll pick up the phone when you need them.
The Behaviour Gap Costs More Than You Think
The gap between what markets return and what investors earn isn’t a rounding error. It’s a wealth destroyer.
That 2024 shortfall of 848 basis points was the second-largest in a decade. DALBAR’s research tracks something called the “Guess Right Ratio”: how often investors correctly time their moves in and out of the market. In 2024, that ratio hit 25%.
Consider two investors who each put away $100,000 20 years ago. One bought and held a simple index fund. The other behaved like the average mutual fund investor: chasing performance, selling during downturns, buying back after recoveries.
The buy-and-hold investor finished with $717,503. The average investor finished with $345,614.
Less than half. Same starting point. Same markets. Same 20 years. The only difference was behaviour.
This is the problem robo-advisors were supposed to solve. Take the human out of the equation. Let the algorithm handle it.
So why hasn’t that worked?
Why Your (non-Justwealth) Robo-Advisor Couldn’t Save You in 2022
If the problem is human behaviour, shouldn’t an algorithm be the perfect solution? Cold, unemotional, incapable of panic.
But often it isn’t enough. Take the 2022 bear market. Stocks and bonds fell together, breaking the diversification assumptions baked into most robo portfolios. And investors didn’t just underperform. They left.
According to Parameter Insights, digital advisor usage in the US dropped from 27.7% in 2021 to 20.9% in 2022. Among investors with $500,000 or more, the collapse was starker: from 38.3% to 14.5%. When stress was prolonged, people didn’t abandon their human advisors. They abandoned their algorithms.
Vanguard’s research on investor loyalty tells a similar story. Among human-advised clients, 93% intend to stay with their advisor. Among robo-advised clients, 88% say they’d consider switching to a human as their wealth grows.
The algorithm can execute perfectly. But it can’t explain what’s happening, why it matters, or how long you might need to wait. And when nobody picks up the phone, that sell button starts to look very tempting.
What Algorithms Can’t See
Algorithms operate in silos. They manage your account. A human advisor manages your household.
That distinction matters more than most people realise. Take tax-loss harvesting: the strategy of selling losing positions to offset gains elsewhere. Done well, it can add meaningful value. Done carelessly, it can cost you.
Canadian tax law includes the superficial loss rule. If you or your spouse repurchase the same security within 30 days, the loss is denied. An algorithm managing your account has no idea what your spouse is doing in hers. The loss is gone. Not deferred. Gone.
Then there’s asset location: the question of which investments belong in which accounts. The right answer depends on your tax bracket, your expected retirement income, potential clawbacks, and whether you’re prioritising growth or income. Algorithms default to risk scores. Humans model your actual life.
And life refuses to fit a questionnaire. Divorce, widowhood, unexpected early retirement — these aren’t portfolio problems. They’re life problems. No risk tolerance slider prepares you for them.
What the Research Shows
The value of human guidance isn’t a feeling. It’s measurable.
Vanguard’s research into what they call “Advisor’s Alpha” suggests a well-structured advisory relationship adds roughly 3% in net returns annually. The single largest component — worth approximately 1.5% on its own — is behavioural coaching.
Half the value comes from stopping you doing something stupid.
Economists at CIRANO tracked advised versus non-advised households across multiple surveys, controlling for nearly 50 variables. Their findings: households with an advisor for 15 years or more accumulated between 2.3 and 3.9 times the assets of comparable non-advised households.
The wealth gap comes from what they call “gamma” factors: higher savings rates, better tax efficiency, and disciplined adherence to a plan through volatile markets. The advisor’s value isn’t in knowing more than the algorithm. It’s in knowing more than you know about yourself.
Three Questions to Ask Any Platform
Not every hybrid model is equal. Three questions separate genuine partnerships from marketing exercises.
First: does every client get a dedicated human advisor, or only those above a certain asset threshold?
Second: can your advisor see your whole household? If they’re managing your RRSP but have no visibility into your spouse’s TFSA, they can’t catch the cross-account traps that algorithms routinely miss.
Third: do they reach out to you during volatility, or wait for you to call? A conversation after you’ve panic-sold is too late.
What this Looks Like in Practice
Justwealth offers a clear illustration of the hybrid model at work. Every client, regardless of account size, gets a dedicated Portfolio Advisor — a named professional registered with a provincial securities commission, with a legal duty to act in your best interest.
The algorithm builds and rebalances your portfolio from over 80 low-cost ETF options. But when life intervenes — retirement looming earlier than expected, a marriage ending — you pick up the phone and talk to someone who knows your file.
The value of advice isn’t in portfolio construction. It’s in the moments when you’re about to do something you’ll regret, and someone who understands your situation is there to talk you through it.
The Right Combination
The best gyms have both: equipment that executes perfectly and trainers who know when to push, when to hold back, and when to make sure you show up.
Investing works the same way. The algorithm handles rebalancing, tax-loss harvesting, low-cost execution at three in the morning. But it can’t sit with you during a divorce, catch the cross-account traps, or make the call that keeps you invested.
The behaviour gap isn’t inevitable. The right combination of algorithm and advisor closes it. Justwealth offers both. So the next time markets fall, you won’t be facing it alone.
While Justwealth provided financial support for this article, the views and opinions expressed are those of the author and do not necessarily reflect the views of Justwealth, or its employees. The content of the article is provided solely for information purposes only and should not be construed as advice of any kind.
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