How Robo Advisors Transform Personal Investment Management

Robo Advisors provide an attractive solution for investors who don’t have the time or desire to manage their portfolio themselves, with low-cost all-in pricing plans and automatic rebalancing services provided as standard features.

Typically, opening a robo-advisor account requires filling out a short questionnaire and connecting with a checking account. Some also offer additional services like tax loss harvesting or goal-based planning.

Cost-Effective

Robo-advisors provide investment management at lower costs than traditional advisors, providing services like automated tax-loss harvesting and personalized account dashboards that help investors understand risk and align their goals with their individual risk profile.

Robo-advisors will typically ask you questions about your financial situation and investment goals on an initial questionnaire, and use these answers to build and manage a portfolio composed of low-fee, diversified ETFs.

Millennials and Gen Z who are comfortable sharing personal data online will find this platform especially beneficial, gaining access to quality investment advice that would otherwise remain unavailable to them.

Easy to Access

Before the invention of robo-advisors, investors had to meet or call their financial advisor in order to execute trades. Now with robo-advisors, customers can access their account online 24/7 as long as they have internet connectivity and manage their investments strategy as desired.

Robo-advisors use standard computer algorithms to assess your financial goals, life stage and risk tolerance before creating an optimal portfolio that matches these requirements. Furthermore, these robo-advisors offer ongoing monitoring and rebalancing without incurring additional human advisor fees – thus saving both time and money in comparison with hiring human advisers directly.

Many robo-advisors also provide additional services like tax loss harvesting, retirement planning and account management that can lead to substantial savings.

Efficient

Robo advisors are known for managing diverse portfolios at low costs, as well as all aspects of investing, such as tax loss harvesting and rebalancing. Furthermore, they keep tabs on your financial goals and investment preferences, and make adjustments as necessary.

An automated wealth advisor (robo advisor) doesn’t require advanced financial expertise to use, although being familiar with technology may help. Robo advisors typically ask about your goals and risk tolerance to tailor a portfolio that best meets them.

Robo advisors may offer lower account minimums than traditional advisors, making them accessible to investors with an array of assets. Their smooth customer onboarding experience and premium offerings with human advisory connections may lead to higher adoption.

Automated

Robo-advisors help save both time and money by automating the management of your portfolio. By collecting your preferences and risk tolerance through an online questionnaire, these robo-advisors use algorithms to craft an investment portfolio tailored specifically to you and your requirements.

Rebalancing of your portfolio to meet your goals. They may even offer tax optimization strategies like automatic loss harvesting.

But robo-advisors cannot do everything. You need that personal touch from time to time when markets drop emotionally; and should you ever have any queries, just call the customer service line and speak with one of their reps.

Time-Saving

Robo advisors can be an easier and cheaper solution for new investors, making shifting assets between accounts simpler. This is particularly crucial in cases where moving from one platform to the next could trigger significant capital gains charges.

Robo advisors typically utilize low-cost ETFs to construct portfolios that are diversified in risk, offering automated portfolio rebalancing and tax loss harvesting to maximize investor returns. Robo advisors may also simplify customer onboarding and reporting while premium offerings incorporating human advisory connects can serve affluent segments as well as incorporate financial planning capabilities that aid with retirement and estate planning.

Scalable

Robo Advisors offer an easy way to manage diverse portfolios with automatic rebalancing, tax loss harvesting and 24-hour customer support services.

Robo advisors usually rely on quantitative or qualitative measures to assist investors with understanding riskiness in relation to their goals, financial situations and emotional preferences. Unfortunately, this approach may not suffice for some investors who require more in-depth conversations with human advisors.

Some traditional players have introduced standalone robo-advisor offerings as an attempt to reach underpenetrated affluent and mass affluent clients. These offerings can integrate with existing fintech solutions to speed up go-to-market efforts while offering services such as dedicated wealth advisory or retirement planning.