Will AI Replace Financial Advisors? Quiz

Answers and explanations appear as you take the quiz.

1. What must a robo-advisor avoid when it harvests a tax loss by selling a fund?
   • Selling during market hours
   • Holding any cash afterward
   • Buying a substantially identical security within the 30-day wash-sale window
   • Reporting the loss to the IRS
2. According to the guide, how do most robo-advisors actually make decisions?
   • Rules-based questionnaires, model portfolios and rebalancing thresholds
   • Large language models chatting with each client
   • Human advisors approving every trade by hand
   • Predicting daily market moves with neural networks
3. What is the regulatory status of robo-advisors registered with the SEC?
   • They are exempt from fiduciary duty because they are software
   • They are regulated only as broker-dealers
   • They are regulated only by state insurance departments
   • They are investment advisers with the same fiduciary duty as human advisers
4. In Vanguard's Advisor's Alpha research, which part of an advisor's value is the largest single contributor?
   • Picking outperforming funds
   • Behavioral coaching
   • Timing the market
   • Negotiating lower custody fees
5. Which task does the guide describe as hard to automate?
   • Rebalancing when allocations drift
   • Building a diversified ETF portfolio
   • Planning finances around a divorce or business sale
   • Harvesting tax losses
6. Which service does the guide use as an example of a hybrid model combining algorithms with human advisors?
   • Vanguard Personal Advisor
   • A spreadsheet budgeting template
   • A discount brokerage trading app
   • A bank savings account
7. How does a typical robo-advisor decide when to rebalance a portfolio?
   • Only when the client asks
   • Every trading day regardless of drift
   • When a news model predicts a downturn
   • When an asset class drifts beyond a set band from its target
8. Which advisors does the guide say are most exposed to automation?
   • Those who focus on estate and tax coordination
   • Those whose main value is choosing investment funds
   • Those who coach clients through market falls
   • Those who use AI to serve more households