Investing 101

What are Robo Advisors? | Robo Advisors Explained

Investing 101


What are Robo Advisors? | Robo Advisors Explained

What are robo-advisors, and how do they work? What exactly is automated investing? The answer is here, with this video from Titan's Emily Bice.

Video Transcript

A robo advisor is a digital investment tool that automates portfolio management. Algorithms are built by economists, quants and financial advisors to tailor investment decisions to an individual's financial status and future goals. The entire process is handled either online with a computer or on a mobile app. What was once a science fiction fantasy is now a reality. Robots can manage your money. How does a robo adviser work? You often begin by filling out a questionnaire about your finances and goals. From there, a robo advisor recommends a personalized investment strategy. Once the strategy is selected, you can set up automatic contributions to the account. After that, the robo advisor takes over, rebalancing the portfolio when necessary to stick to your initial allocations. Most robo advisors use passive indexing strategies. Investing with the robo adviser offers clients the benefits of low fees, selection, risk preference, and convenience. What it doesn't do is offer investors client to advisor customization, human expertise, and transparency. 

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