Plain-English definitions, reviewed by an independent investor
Robo-Advisor
A robo-advisor is software that builds and rebalances a diversified portfolio from a short risk quiz.
A robo-advisor is software that builds and rebalances a diversified portfolio from a short risk quiz.
(Automated allocation and rebalancing)
Why it matters
It lowered the cost of professional management to near nothing.
Common confusion
It is generic; it will not coach you through a personal crisis or tricky tax.
Frequently Asked Questions
Cheaper than a human?
Usually yes, with low minimums, but less tailored advice.
Are robos safe?
Regulated like other advisers; the portfolios are plain diversified funds.