So, you want investment advice, but you don’t want to commit to, or pay for, your own personal financial advisor.
Enter the robo-advisor.
Robo-advisors have lower fees and low or even nonexistent investment minimums, so you don’t need a lot of cash on hand to invest with them.
But what is a robo-advisor?
Robo-advisors are digital platforms that you can access online or through an app.
You can think of them as the bridge between do-it-yourself trading platforms and personalized wealth management.
Robo-advisors use computer algorithms to build automated portfolios with a targeted risk level and provide digital investing advice. The portfolios they offer are usually made of low-cost, passively managed funds.
Some robo-advisors also provide financial planning tools and educational resources.
Different robo-advisors have different features, so make sure to do your homework and understand your options before you get started.
So, what does investing with a robo-advisor look like?
Most start with a basic questionnaire geared toward understanding your investing goals, time horizon, and risk tolerance. Once you fill out the questionnaire, they’ll match you with an investment portfolio that best fits your needs.
From there, you may have some wiggle room to tweak your portfolio, but it’s usually limited.
So, who should use a robo-advisor?
They’re ideally suited for new or early to midcareer investors who want to do a little more with their investing but not make it a full-time job.
