Engaging a financial or investment advisor can be a significant step if you are looking for counseling on investing your money wisely. They can help you to work towards accomplishing your financial goals . Sometimes, however, it is not feasible for you to hire a brick and mortar financial advisement firm. This problem is where a Robo-advisor could come into the equation.
A Robo-Advisor is an online, automated and algorithm-driven financial planning service that requires little to no human contact. There are quite a few services like this on the market, with one of the most popular and the first to appear being Betterment, which was founded in 2008.
These services collect info on the client’s goals and situation through the form of a questionnaire. This primary form is where the service will determine your overall investment and retirement goals as well as whether you are looking to invest aggressively or conservatively.
The automated advisor will then provide you with a range of services. It is capable of rebalancing your investment portfolio if the changes are necessary to realign your trajectory with your original goals. It is equipped with different tools designed specifically for the user and with the intent of giving you complete and unfettered access to your investment standings. Robo-advisors are even able to assist you with tax-loss harvesting. The process of tax-loss harvesting involves selling a security after it has experienced a loss to offset the taxes on the gains and income of it. This process helps you to reduce your overall tax bill.
Robo-advisors are generally more accessible to the general public than a full-service financial advisement firm. These services are available to the consumer around-the-clock and often feature a more cost-effective option. Most online advisement services offer low to no account minimums as well as small premiums pulled from your account for the cost of the service.
Robo-advisors are equipped to weigh your particular preferences, goals and risk tolerance to provide you with a unique investment service, while also keeping track of outside forces such as market conditions and market volatility. They could be a viable option for those who are not ready or cannot work with or cannot afford a standard advisement firm.