There are many options when it comes to money management services, and one of the most popular nowadays is Robo advisors.
These investment management tools are budget-friendly and allow the individual to focus on things that are more important to them than sitting there trying to come up with strategies to invest their money.
Suppose you have limited time and are looking for a way to invest money with minimal entry fees for you. They are automated, so it takes a little time, and it is not necessary for you to be well-versed in financial planning and management.
There is change, but maybe you’re still thinking you’re not sure if this type of money management system is right for you.
And that’s why we decided to create a Quick guide to help you with all the information you need to know to make an informed decision about your financial future.
What is it Good For?
When you’re considering utilizing a Robo advisor, you probably want to know what it is good for. Many benefits come with utilizing this type of money management system. But the four biggest of those are:
- It’s great for easy access and a beginning mind when it comes to financial planning.
- It is a great option for those who are super busy and don’t have much time to waste researching the market and finding good investments.
- Because of the systems and access to financials and strategies, it is easy to invest.
- Also, a great option when looking for a relatively low-risk way of investing your money in hopes of building your bank accounts.
What are the Best Features?
This type of money management system is inundated with a lot of great features. Everything from the easy account setup to the personalization that comes when building your profile management and investment markers can be considered great features.
Along with this, though, there are also a couple of other features that we think stand out when looking to decide whether this is the right option:
- Extremely solid planning when it comes to goal setting
- versatile account services and access to tools
- Heightened security features place
- Access to tools for improved education
- Low fees
Is Robo-Advisor Trustworthy?
Whenever you use anything online, there’s always the question of trustworthiness and safety. But the truth is that Robo advisors are very safe to use.
You can trust your money with them because they have been under regulation and scrutiny by the government and have many laws put in place to protect you.
Not only that, but they use heightened levels of security because they are a financial institute, and they are handling other people’s money.
So you don’t have to worry about trusting them because they typically have security measures in place that will help keep your money and information safe.
Is Robo-Advisor Good for Beginners?
Because it’s an automated service that gives you tools and access to plenty of education, Robo advisors are a spectacular way for beginners to start investing.
These automated services give you a wealth of information and easy portfolio management systems on top of not costing a lot.
Both of these factors are extremely attractive when it comes to beginners, and they’re investing in a career because it allows for less worry about making mistakes.
So if you’re a beginner investor, we highly suggest you check out a Robo advisor and perhaps opt to use it for an amount of time so that you can accrue enough information to go out on your own.
What are the Downsides of Robo-Advisor?
Before you invest your hard-earned money, you also need to understand the drawbacks of each option you’re looking at. In regards to Robo advisors, there are a couple that may be deciding factors on whether you opt to utilize this investment option:
- You were lying solely on an automated service, so there is little to no human interaction. Of course, there is usually customer service that you can reach out to, but on the whole, it’s all about an algorithm.
- Others have a limited investment option selection.
- The algorithms might not consider every investment opportunity available to you due to your specifications at the beginning of the process.
Final Thoughts on Should You Use Robo-Advisor
If you are a new investor or just someone with little time on your hands, then the automated money management and investment tools are a great option for you. It allows you to set parameters and then walk away with little money needed to start and time spent worrying.
On the other hand, if you want the versatility of options to invest in and have the time to do a little research, we think something like index funds might be a better choice for you.