There's a slew
of robo advisors on the market, all promising to help you invest based on your lifestyle, income and age.
In fact, many financial advisors are
using robo advisor software now to actually manage your specific investments for you.
You pay $ 10 a month no matter how large your investment is, and there are no extra fees or changing rates like
other robo advisors.
Multiple different segments of the investing public have already taken advantage of
robo advisors for a variety of reasons.
While many people see
robo advisors as a natural replacement for financial planners, there are some key differences.
In a majority of cases, companies are able to offer
robo advisor services with significantly lower fees than traditional human advisors while still maintaining approximately the same return on investment.
It's important to mention that
most robo advisors work in the intersection of behavioral finance and portfolio theory.
This is also a much higher minimum requirement than almost all of the other
top robo advisors on the market.
Traditional investment advisors typically charge anywhere from 1 % to 3 % of the value of your portfolio, while
robo advisors charge less than 1 %.
And retirees and high net worth individuals can often test
robo advisors because they have more disposable income.
Below, we've outlined the five groups that use and benefit
from robo advisors and explain how these automated products serve each segment.
This is not something traditional providers or other
robo advisors typically provide, as it requires a sophisticated technology.
So as pure and
hybrid robo advisors begin to manage more global wealth, more investors would benefit from letting these automated services manage their wealth.
This flat fee, particularly with the initial 0 % rate, compares quite well to the other
major robo advisors on the market.
The disparity is the reason
why robo advisors have become all the rage since the movement first started in 2008.
It uses the same
robo advisor technology to optimize your investment returns while working within the investment offered by your company's retirement plan.
Is this a pure, totally
automated robo advisor, or is it a hybrid version utilizing some level of human advice?
They're
called robo advisors, and they're making investing easier — and more affordable — for just about anyone.
These types of
robo advisors require that you invest a little more money if you want to take advantage of the services.
It remains to be seen
if robo advisors are the future of investing, but it's certainly the best example of applying cutting - edge technology to the industry.
A
typical robo advisor will start by asking you a series of questions that are designed to determine your risk tolerance and investment goals.
And approximately 60 % currently use some type of financial advisor, which
means robo advisors can and should target them.
We believe that in the future, there won't be a distinction
between robo advisors and brick - and - mortar [firms].
I believe that [several] robo advisors will ultimately experience a fee increase.
Because they are fully automated,
robo advisors simply don't have the kind of investment flexibility you can get with a traditional investment advisor.
This is a bare -
bones robo advisor, and many services that are offered for free at other firms come with a price tag.
Just a few years ago, the
term robo advisor sounded like sci - fi to most people and not a legitimate investment tool.
They are quickly becoming the go - to options for clients seeking to replace their human financial advisors with a 24/7
robo advisor dedicated to their accounts.
The creators of this
sophisticated robo advisor include certified financial planners, analysts, and digital engagement experts to name but a few.
It also is one of the highest -
rated robo advisors when it comes to actual investment practices.
You can use it like a
traditional robo advisor, or use it like a traditional brokerage account to buy individual stocks.
Does a
flexible robo advisor (offering automated, passive investment strategies tailored to investor situation / preferences) perform well in comparison to mutual fund / stock portfolios they might replace?
Their ability to help investors manage their long - term investments at attractive price points has contributed to the popularity
of robo advisors among cost - conscious investors.
And often,
robo advisors offer cheaper fees than human advisors, which also makes them attractive to this group.
Plus,
many robo advisors have few minimum requirements — perfect for millennials who are just starting to invest and who don't have a lot of extra money to save every month.
This list of
top robo advisors is just the beginning when it comes to the growing market of automated investing.