In many ways technology has lowered the cost of service delivery. For a nominal cost the friendly automated voice of the credit card company allows us to “press 1” to find out our balance. Similarly we can contact a customer service rep halfway around the world when we need to speak with someone.

The question is whether these services are effective. Does lowering the cost of providing them enhance the customer experience? It’s OK to admit it – we’ve all mashed our keypads in hopes of getting to a person. We’ve all grown frustrated with the cookie cutter answers that don’t solve our problems.

Clearly lower costs can’t be the only benefit we seek when we buy a product or subscribe to a service. We seek answers to our questions – solutions to our problems. Yet in our price-conscious society the solutions we’re given focus on driving down cost instead of selling the benefits we want.

The financial industry isn’t immune.

Why deal with an insurance advisor when a few clicks can buy a policy? Insurance is all the same. (insert sarcastic tone here)

Why deal with a CPA when TurboTax can fill out a tax return? There’s no thought or planning involved. It’s just putting numbers on a page. (sarcastic tone required yet again)

So called robo-advisors are the latest attempt for the technology industry to crack the financial industry. These online services provide automated, algorithm-based investment advice. They focus on investments as though they are the only piece of the puzzle. As a result human beings are cut out of the loop (hence the cost savings) and services are limited. No advice is provided or integrated with equally important financial puzzle pieces such as retirement, taxes, estate planning, insurance, cash flow, company benefits, Social Security, etc.

What’s puzzling is the praise robo-advisors have received. Sure they automate services like assessing one’s risk tolerance or choosing an asset allocation but even if through crude and unintuitive websites 401(k) providers and the mutual fund industry have offered services like these for years.

Need proof? Go to Vanguard’s website and answer a few cookie cutter questions. You’ll find your “solution” in one of their Target Retirement or LifeStrategy funds.

So what have robo-advisors really done? They’ve streamlined a clunky process, offered some pretty websites and replaced fund selection with ETFs as a means of recreating the target-date fund approach.

Big Media has, however, latched onto the robo-advisor craze. They’ve championed these services as a perfect substitute for traditional financial planning. It’s a misleading comparison.

Robo-advisors target the young, impatient and cost-conscious – often some combination thereof. These potential customers typically have limited wealth and, thus, limited experience in managing wealth. It makes for an inefficient market between what true planning is (all-encompassing advice and strategies going beyond investments and delivered by a human being capable of understanding behavioral biases) and what masquerades as planning – misguided services limited to investing where “solutions” are cookie-cutter portfolios based on short questionnaires. Just how is this different than the target-date funds we’ve had available for years?

There’s no denying there’s a market for robo-advisors. Surely some can benefit from their services. The danger is confusing an automated, cookie-cutter investment solution aimed at a narrow market as an effective alternative to broad, holistic financial planning and wealth management.

The advice is as always – know what your needs are before seeking solutions. Caveat emptor!