If you haven’t heard of ‘Robo-Advisors’ before, don’t worry as they’re a fairly new investment platform. These are simply digital finance advisors, and they differ from company to company. The term ‘Robo-Advisors’ is used as a one-size-fits-all term, meaning that they deal with all manner of investments. What this term includes is a specialist investment manager class and a form of highly specialised digital software that uses a combination of complicated algorithms.
While some Robo Advisors are fully automated, others require the assistance of human knowledge as well. Regardless of which model is being used, each one is designed to guide customers through the investment process seamlessly. The concept behind this new craze is simple: these robots take the human emotion out of investing and make suggestions based on which investment yields the most potential for the investor.
Bearing that in mind, you might be wondering what other benefits these systems offer? For everything that you need to know, read on.
Low fees
One major benefit of Robo Advisors is the fact that they take low fees. Prior to the invention of these systems, an investor was lucky if only 1% of their investment was taken by advisors, whereas these robotic advisors are much more affordable. Ranging from a 0% cost on some platforms to 0.2% on others, such as Betterment – you can read Betterment reviews online – these platforms are far more budget-friendly.
Award-winning algorithms
Did you know that the algorithms used have won awards? These systems rely on Nobel Prize-winning investment information to ‘drive’ their models. The idea is to create the greatest investment potential but with the smallest level of risk – these robots are designed to find the very best solution for each individual investor.
Easily accessible
Another pro of Robo Advisors is that they are easily accessible and highly effective. Today, many professional financial advisors have begun using this technology to help them make decisions when it comes to their clients’ investments, ensuring that they can get them the best deal possible. What’s great about this is that not only does it improve the potential for investment success, but it also increases the speed of these tasks being dealt with, reducing the overall cost of investing.
Because of the lower prices and ease of access, Robo Advisors are opening up the market for investors of all ages. In the past, younger investors were unable to afford to invest, but this technology is changing that and making the sector a far more accessible and diverse one. A lack of funds no longer has to prevent potential investors from investing as doing so doesn’t have to use up a large chunk of their investment money.
The fact is that for many investors, Robo Advisors are one of the best updates seen for a long time. Of course, these automated systems do come with some drawbacks, but for the most part they can be highly beneficial and hugely useful, which is why they have grown so significantly in terms of popularity.
