Looking for a means to manage your investments and get financial advice at a pocket friendly fee? Well, look no further, Robo advisor is here! They are online software that use little or minimal human intervention to manage your investments.
Robo advisor is the saviour for the do-it-yourself kind of people who are tired of thinking hard on how to select the appropriate investment, carry out the rebalance and keep records of the accounts. This software has the capacity to identify and select investments and create differentiated portfolio for you.
Using Robo advisor you can benefit from reduced tax bills since some has the ability to adjust your investments in order to make even your portfolio as per your targeted allocation. Read through with me as we review how Robo Advisors work and the benefits of using them.
How Robo advisors work
It’s easy to use a Robo Advisor. You simply pay for the service fee and the desired investment and ready to go. Robo advisor is very flexible. You can choose to pay a monthly service charge or you may prefer paying a percentage of assets.
In consideration of the size of your portfolio, the monthly fee that you pay will range between $15 to approximately $200 per month. In case you opt to use percentage of your asset, it will accumulate a fee of about 0.15% to 0.50% of your account size annually.
For efficient use of Robo Advisor, you will also be required to cater for any other expense associated to the investment that Robo advisor will run for you. For instance Funds used to trade for your investment has a bit of expense ratio which one is required to cover. This fee is deducted before receiving your returns as an investor.
Worried about how to start off? Relax, investors are well taken care of by most of the online portfolio solutions as they provide a specified period for free trial so the investor can understand how they work before one is charged.
Who uses Robo Advisors?
There are numerous wealth management platforms online that uses this service. The list below documents not all but just a few of them.
• Charles SCHWAB
• Market Riders
Great news to the entire employee fraternity! The Robo advisor will soon be launching a plan to manage your private pension funds and the above named online portfolio solutions among others will be among the first to implement it, so look out to any of your preference for the service.
Benefits of using a Robo Advisor
There are multiple benefits of using a Robo advisor. When investing, there are many factors that can lead to costly investment mistakes. One such factor is that humans engage emotional decisions at market low and high seasons which leads to poor outcomes. A Robo Advisor is software so using it, such emotional mistakes are eliminated.
Robo advisor helps reduce stress. You only need to key in your details and create your account then the rest the software automates it. No more worries of whether and when to change your portfolio, the software manages your trades and chooses the most appropriate investment for you
Robo advisors are a great relief to investors who wish to excel in online investment.