Not everyone knows how to manage their money and assets properly. Most people do not have technical knowledge about various investment options, while others do not have much time to do it properly. Thus, hiring a professional financial and investment advisor is the best next option for most people. Choosing the right financial advisor is essential for your financial well-being.
Today, there is a new trend in the investment industry – ‘robo advisors’. It is an automated system that allocates wealth and assets for investment using advanced computer algorithm. It might also include some need for human financial advisors especially for services such as estate planning, taxes or retirement. For those with little knowledge as to where to start with investment planning, robo advisors are the best place to begin.
Robo advisors are increasingly becoming more sophisticated every day so that they can provide personalized investment advice to people. They use a myriad of information such as age, investment style, goals and others to offer appropriate investing plans best suited for them. While they do are not here to replace the traditional investment advice to people in a unique situation, they are filling the gap for people looking for quick, easy and affordable investment ideas.
Here are some top benefits of hiring a robo advisor to manage your finances –
User-friendly – Setting up an account with the top robo advisors is very easy. All one need to do is to create an account, answer some fundamental questions about the various assets that an individual holds, their financial goal and also risk tolerance. The automated system will match them with the best investment portfolio. It makes investment much more manageable.
Affordability – Robo advisors are cheaper than human financial advisors. Human advisors charge fees for their services which is much higher as they have to make a living out of it and also pay for their business expenses. Robo advisors, on the other hand, have no overhead costs allowing them to offer most of their services at low cost.
Accessibility – Robo advisors are easily accessible through various electronic devices. One can use their desktops, laptops or even their smartphone to check on their investments helping them save time and money. Since the robo advisors are available 24/7 and 365 days a year, they are invaluable to people with little time to go and meet human advisors with fixed business hours to seek advice.
Higher Tax Efficiency – Most of the advanced robo systems are created with tax efficiency features to help increase savings. Robo advisors can help them in increasing their after-tax returns. These features are useful especially if you are using a taxable account.
Even though one size might not fit all, firms such as roboadvisors offer a great place for people to start their investment planning. They can easily plan a personalized asset allocation plan that is customized to their needs. Each of the clients has direct access to their account and can manage it without the need of the middlemen.