Written by What is a Robo-Advisor?
- Definition: A robo-advisor is an automated platform that creates and manages your investment portfolio based on algorithms.
- Low-Cost: Robo-advisors are typically more affordable than traditional financial advisors.
- Hands-Off Investing: They provide a passive investment experience, where you only need to set your goals and risk tolerance.
Why Use a Robo-Advisor?
- Affordability: Robo-advisors usually charge much lower fees than traditional advisors, helping you keep more of your investment returns.
- Ease of Use: The platforms are user-friendly, and you don’t need extensive investment knowledge to get started.
- Custom Portfolio: Robo-advisors offer personalized portfolios that are automatically rebalanced to keep your investments aligned with your goals.
How to Choose a Robo-Advisor
- Fees: Compare the fees across various robo-advisors to find the most cost-effective option.
- Investment Options: Ensure the platform offers the types of investments you’re interested in, such as socially responsible funds or tax-advantaged accounts.
- Account Types: Make sure the robo-advisor supports the types of accounts you want, like taxable brokerage accounts or IRAs.
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