Robo investment is an automated software that changes and makes adjustments to a particular investment portfolio using precoded algorithms. Alternatively referred to as robo-advisors, the software does not need human supervision, and it is capable of collecting information from clients to analyze, process, and invest assets to match their portfolio and financial goals for profit.
Robo investment management is made effective by using some of the best technology available in the market to assist in investments.
Here are a few benefits of using a robo investment management advisor.
- Low-cost alternative
Robo advisors are a low-cost alternative, as one advisor is capable of handling multiple portfolios with increased speed and efficiency. The software operates and makes decisions in real time with a very low margin for error in calculations. The popular robo investment management software programs charge an average annual flat fee between 0.2% to 0.5%, which is comparatively lesser than what a human financial advisor will charge for typical services.
These systems are available online at all times and only need to be shut down for diagnostics and maintenance once every few months. Also, a robo investment management advisor software requires a steady Internet connection to be online and keep track of multiple portfolios for the clients to efficiently use the investment strategies.
- Avoid the nitty gritty of transactions
Robo advisors are designed to handle a trade or investment right from registering an account to finalizing the trade to book a profit. As the system is online, all you have to do is push a few keys to execute the instructions and let the software do its job.
Best robo investment management advisors
You must take into account a few key factors before creating an online portfolio, including the minimum amount necessary to open an account, the average all-in-cost, and whether the company also provides human advice apart from the automation services. Some of the best robo investment management advisors in the country are:
The robo investment management division of Charles Schwab manages over $23 billion worth of assets for investors. A minimum low balance of just $5000 and low annual account management fees afford everyone a fair chance to invest and doesn’t limit the opportunity to only the rich. A simple survey allows the company to understand the client investment expectation and the rest is done by an automated robo advisor software to book profits. A diversified portfolio of ETFs allows investors multiple avenues to make their money back with a good profit margin without worrying about the risk. Featured tools of the robo investment management software include tax loss harvesting and automatic rebalancing to give clients a diverse portfolio with the best returns.
With over $13.5 billion in assets for management, Betterment is one of the top advisor services in the market. The robo advisors charge a meager 0.25% to 0.40% fee of the amount in the portfolio to offer quality investment services. The premium services are slightly expensive and charge a fee of 0.40% of the client portfolio. You have to complete an investment survey to help the advisor understand your financial goals and set up a profitable portfolio that is managed by automated algorithm systems. One of the main highlights of opening an account with Betterment is the no minimum balance feature enabling everyone a chance to invest and make some money.
The robo investment management service and automated advisor has over $10 billion in assets under management. The low account management fee of 0.25% is the key highlight of Wealthfront with an even lower annual percentage rate (APR) of 0.08% APR available for ETFs. Wealthfront is a great choice if you are a first-time investor looking to test the waters before committing your hard-earned wealth in a low-cost investment portfolio.
Wealthsimple offers socially responsible avenues for investment. This means you get an opportunity to manage your investment portfolio with companies that have low-carbon emissions, support gender diversity, or promote affordable housing among many other noble causes. If you feel the need and responsibility to invest in such companies to book a profit and at the same time contribute to their mission and vision that align with your values, Wealthsimple offers the opportunity to do so with calculated investments.
Women investors interested in maintaining an automated portfolio can turn to Ellevest for services. The company stands out for offering assistance with a specific focus on women investors to meet their criteria and expectations from the investment. The company charges a competitive rate of 0.25% annual fee for transactions but requires a minimum capital of $50000 to create a portfolio. While the company does not feature tax loss harvesting, the robo advisor software still takes into account a good strategy to create personalized portfolios.