Every day the world pushes forward with advances and, all of a sudden, what used to be the latest and greatest becomes outdated. Not long ago, choosing the right financial advisor was about finding a person you could trust with your finances. But now, the right advisor for you may not even be human.
RoboAdvisors advise you virtually. By answering a series of questions designed to identify pertinent information such as financial goals, risk aversion, and time horizon these “advisors” create a personalized portfolio for your financial needs. These robots even monitor your investments throughout the year and are capable of making tax-efficient adjustments when necessary.
So is a RoboAdvisor right for you? Freedom Debt Relief Reviews everything you need to know about RoboAdvisors.
As with many instances where robots replace humans, the cost comes into play. Clearly, companies taking advantage of computer algorithms can afford to charge much less than those using manpower. For example, Betterment, an online investment company charges 25% of your account balance. (This number may vary depending on the size of your balance and monthly contributions).
For perspective, a recent Fortune article outlined that the average investor with under a million in investments pays 1% of their balance in fees. A whopping 4X difference. Freedom Debt Relief reviews in investing, where interest adds up in the long run, this is a significant difference.
A RoboAdvisor is particularly attractive to first-time investors or those who are having trouble taking the first step to invest. RoboAdvisors offer a simple alternative to sifting through extensive information on how to invest or meeting with a financial advisor.
Many people try to take their investing into their own hands. While it is a huge benefit to be financially savvy, taking personal responsibility for all your investments can be more headache than it is worth. RoboAdvisors invest in broad-based index funds which basically means that your investment is diversified throughout the market.
For many people, meeting with a financial advisor is a significant obstacle to their investing. The idea of letting someone in on very personal financial details can be uncomfortable. RoboAdvisors like Betterment knock down this barrier by removing the human interaction element.
Moreover, financial advisors may not be appealing to investors without a lot of money. Part of the advantage of RoboAdvisors is that you can invest a very small amount. Freedom Debt Relief reviews start with a little and work your way up.
Freedom Debt Relief reviews some people simply aren’t comfortable leaving their hard-earned finances to a robot. That’s where hybrid RoboAdvisor/human advisors come into play. The hybrid option is great for people looking for more nuanced advice on investing who still want to take advantage of the technology. The advisor can give you advice on things like how to save more for retirement while the robot handles asset allocation.
Hybrid options usually mean that you’ll have a team of advisers helping you. The drawback is that when looking for advice, you will usually get whoever is available when you call as opposed to someone solely dedicated to helping you.
Freedom Debt Relief reviews stay up on current trends so you can make the most out of your hard-earned money.