Robo-advisors have become a big part of online investment, but many people have never even heard of robo-advisors.
The name ‘robo-advisors’ first started being used in the US, and it was used to describe technology that can be used as an online investment management service. The term is now used all across the world, and robo-advisors are more popular than ever. But why are they so popular?
One of the main benefits of robo-advisors is that they have much lower fees than human advisors. According to Investopedia, in the past, most investors were happy to receive professional investment advice for less than 1%, but current robo-advisor models offer around 0.25%, which is much cheaper. This is because they are very efficient and they don’t require human assistance, so they can provide investment advice without an expensive price tag. This is ideal for anyone who doesn’t have a large investment pot but needs financial and investment advice.
Robo-advisors are also fully regulated. They all have to be authorised by the Financial Conduct Authority (FCA), so they need to meet certain standards to be valid. This means that the robo-advisors have to meet the same standards as any human advisor, which is reassuring.
If you are interested in finding out more about back office systems for financial advisers and robo-advisors, check out back office systems for financial advisers.
Robo-advisors in the media
Robo-advisors often get a lot of bad press, and normally articles about robo-advisors are accompanied with a picture of detailed computer code. This creates a negative image of robo-advisors as it makes them seem overly confusing and intimidating, but in reality, robo-advisors are fairly simple online wealth managers that use positive algorithms to invest money smartly.
If you are thinking about using an online robo-advisor you can be safe in the knowledge that people are working alongside the robot throughout the process. If you have any issues or any problems you will always be able to speak to a customer service team, and you don’t have to worry about any issues arising from working with a robot as human advisors will ensure that this doesn’t happen.
Robo-advisors are definitely here to stay, and this is great news for anyone who wants to find out more about investing but doesn’t have the money to hire a human advisor.