Financial advisors play a crucial role in helping you with your investments and achieving your financial goals. However, many times, people cannot afford a personal financial advisor. To curb this problem and make easy investments, a Robo- advisor can be your go-to option.
Robo- advisors are basically algorithms that help you by investing your money in the right places. These usually come in apps; you don’t even have to break a sweat for investing. They handle everything.
How do they work?
To start with a Robo- advisor, you can choose an app from the app store. There are many applications available. Once you download the desired app, all you need to do is sign up for it.
Further, The Robo- advisor might ask you a few questions about your investment plans and goals. This helps him understand and curate an investment plan specifically suited for your needs. Here’s a list of questions you need to think about when you start off with a Robo- advisor –
- What amount of risk can you handle? This question becomes essential. You must plan beforehand that what amount of risk you can stomach. He might ask you for how long do you want to invest? Are you willing to handle short-term losses for long-term gains? The Robo- Advisors will then search for an investment plan according to your answers.
- What is your financial goal? In this segment, you are supposed to feed your expectation of returns from your investments to your Robo. He will then curate an investment based on your returns and risk capacity.
- What kind of assets do you want to invest in? Your advisor will now show you a list of portfolios that will match your return expectations and risk appetite. You can choose the one that suits you.
Once you fill out the questionnaire, you can relax and let your Robo Whizz do the work for you.
Benefits of the Robo – Advisors:
- Firstly, the cost of investment is much lower. Since you just have to pay for the software. Actual professional financial advisors are costlier to hire. With Robo- advisors, you need to spend nearly 0.1% – 0.5% of the assets under their management. However, with Mutual funds, it can range between 0.5 %- 1.0%.
- It is beginner-friendly. Robo- advisors will handle all your investments and get you great returns. You need not engage in the process.
- There is no such thing as a minimum investment in the case of Robo-Advisors. You can invest whatever you are capable and willing to invest.
Robo-Advisors are among the in-trend investment avenue which you can consider. Many of the investors in Singapore have had a successful trading and investment stint with Robo-Advisors.
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