A Robo-advisor is a new investment platform that offers investment managers and uses complex computer algorithms to guide investors in the purchase of Online Stocks. While some Robo-advisors are completely automated, others eventually lead an investor to human assistance.
A Robo-advisor takes the emotion out of the investment process and ensures that an investor receives better returns for a broker fee that is lower than that charged by traditional finance advisors. Over and above this, the investment platform offers a variety of benefits. Let’s take a look at a few of them.
Benefits of a Robo-advisor
- Lower broker fee
In yesteryears, people who received professionally managed investment assistance for less than 1% of AUM (assets under management) were considered very lucky. The automation of this service has significantly changed the landscape.
Ranging from zero-cost services to betterment portfolios that include cryptocurrencies, there are many low-cost Robo-advisors to choose from. These online advisors are designed to favor the cost-conscious investor.
- Remarkable Investment Models
Many Robo-advisor algorithms are designed using Noble Prize-winning investment theory blueprints. These online advisors use best-practice methods that create a diversified portfolio for the investor and ensure that they receive greater returns with the least risk possible.
The more state-o-the-art Robo-advisors also use the most sophisticated investment portfolio research tactics to drive their products.
- Let’s human advisors focus on clients
More and more traditional financial planning practices are white labeling Robo-advisor platforms for the benefit of their clients. It rids financial advisors of the task of choosing assets. In exchange, financial advisors can spend more time with clients discussing individual tax, estate, and financial planning issues.
- Offers young investors an opportunity
Many Robo-advisors allow people to open an account for $0. This makes it possible for even young people who have just started working, to make investments.
Young investors and investors with the low net worth may not have sought professional financial advice in the past. However, Robo-advisors are changing it all and are increasing the market for financial advisory clients. The low fee and easy access to professional financial management are enabling many consumers to choose Robo-advisors as part of the DIY model.
- Easy accessibility
Some Robo-advisor models solicit $1000 to $5000 to get started. On the contrary, newer Robo-advisor models have ushered in the zero and near-zero minimum balance trend that has made available automated financial advisory management to investors from all walks of life.
Let’s say you are a new investor who is keen on a specific sector or investment theme. While some advisors have hundreds of portfolios to cater to your needs, other Robo-advisors offer plans that cater to investors seeking rock-bottom fees.
There are several Robo-advisors with highly diversified low-fee ETF portfolios. They will do a remarkable job of assisting you in your journey towards greater returns through online stocks. While some Robo-advisors offer services such as balancing and tax-loss harvesting, others offer even more services and choices for investors.
So, wait no further, get hooked to a reputed Robo-advisor today!