What are robo-advisors? How can they help investors in Australia?

Summary

  • Robo-advisors are digital or automated platforms that offer financial planning services at zero human interaction or supervision. 
  • They have the capability to make decisions on behalf of investors on how to invest their money.
  • However, investors must be familiar with the fee structures of different robo-advisors before going ahead.

Ever heard about robo-advisors? If not, continue reading. We would discuss about something very interesting for investors in this article.

Under the traditional method of investing, investors visit investment advisors in person to discuss their investment portfolio and chalk out a future strategy.

The investment advisor gathers all the information such as investor’s age, his risk-taking capability, available investment amount, etc., to arrive at a conclusion about how much percentage of his portfolio should go to what kind of investment?

Well, as the times changed and digitisation increased, human interaction in trading has also reduced. People are now taking to robo-advisors for financial planning service.

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So, what are robo-advisors?

Robo-advisors are digital or automated platforms that offer financial planning services at zero human interaction or supervision. 

A robo-adviser generally employs a survey to collect information concerning financial situations and targets of investors. Based on this data, robo-advisors offer financial service.

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They have the capability to make decisions on behalf of investors on how to invest their money. Generally, the robo-advisor employs a survey to collect inflation about their clients.  Based on this, it offers financial advice to them.

A few additional services offered by robo-advisors include goal planning, portfolio management, security, account services, and robust education.

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Here are some widely mentioned robo-advisors in Australia. However, investors must conduct proper research at their end before choosing any of them.

Stockspot

Stockspot helps an investor to build custom portfolio using exchange traded funds (ETFs).  Stockspot offers four portfolios – Topaz, Emerald, Turquoise, Sapphire, and Amethyst, using which investors can invest in Australian shares, global shares, emerging markets, bonds, and gold.

Six Park

Six Park is known to have some of the top-notch algorithms for investors. It has four portfolios to choose from, including - Conservative Portfolio, Conservative-balanced Portfolio, Balanced Portfolio, Balanced-Growth Portfolio, and Aggressive Growth Portfolio. 

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Clover

Clover is another popular robo-advisory platform in Australia. You are not charged fees for opening an account, getting advice, or even rebalancing your portfolio.

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Quiet Growth

This platform is known to use Modern Portfolio Theory Investment methodology to determine the level of liquidity in retirement. Quiet Growth allows investors to choose between five portfolios.

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Things to consider before trading with the help of a robo-advisor:

Clarity about financial goals

There are many robo-advisors currently operating in Australia. Investors should be clear about their financial goals before taking up services of any robo-advisor. Based on your requirements, you can choose between a retirement account or a personal trust.

Fee structure

It is important to be familiar with the fee structures of different robo-advisors before going ahead. Investors must also properly investigate any hidden charges.

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