Pocket Advisors: The Robo-Financial Planning Tech You Can Fit in Your Pocket

Computers that aid in finance are soaring in popularity. This modern way of investing is threatening to do traditional financial advisors out of large amounts of business. By 2020, automated financial advisor services and apps are expected to manage around 10% of all global AUM (assets under management), according to Business Insiders BI Intelligence research service.

Pocket Advisors

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Robo-Advisor – What Is It?

It is basically a method that automates the asset allocation of investments via a computerized algorithm. It is an online wealth management service providing portfolio management advice. Both robo-advisors and traditional financial advisors use the same software, but only human advisors provide services such as taxes, estate planning or retirement. Robo-adviser software analyses your current financial status, monetary goals and risk aversion, then recommends the best portfolio of stocks available.

Do Robo-Advisors Work?

Many companies can offer robo-advisors at much lower fees than human advisors with around the same return on investments. It is the low-cost, low-account minimums that are attracting younger investors, who are tech-savvy and comfortable doing things online. Avoiding expensive financial advisors, the automated robo-advisor is opening new doors in a competitive marketplace, especially for beginner investors and those with an uncomplicated portfolio, but risks have emerged.

Hybrid robo-advisors combine human input with an automated investment solution for a more balanced approach. Companies such as https://www.intelliflo.com/ provide back office systems for financial advisers, providing them with the service standard their investors demand.

How the Internet Has Changed Financial Investing

Millennials will find it hard to imagine a world where they are unable to look up the history of their portfolio stocks immediately online. But only 20 years ago, this wasn’t possible. Before the internet, the best place for a potential investor to research financial trends was the library, where they could read books by successful investors and study individual companies in newspaper archives. It was not unusual for investors to contact companies to request their quarterly reports.

Nowadays, we can access this information in a matter of seconds via the internet and download a company’s quarterly report via their website. Hundreds of sources provide stock price information, and financial experts are everywhere with their stock market analysis. This has seen the birth of robo-advisors, as investors no longer need to rely on investment managers, brokers or other intermediaries.