There is so much that technology has given us in the last decade or so. It has simplified every sphere of our life. It has also made the investment process easy for millions. One of the recent trends we have seen is robo investing. So let us learn about it in detail.
What is Robo Investing?
Robo advisors are financial advisors that provide you with automated investment solutions online. You do not have to go to financial planners and work with them to create a financial plan and make an investment. There are investment apps in India that make it possible now.
Robo investing is about using digital advisors who provide financial planning services and portfolio management with little or no human intervention. A decade back, internet banking was a new concept, and people were skeptical using it. The same is going to happen with Robo investing. Today, investors are reluctant to use it, but in coming years, more and more will be using it.
To sum up, robo advisorsx` are digital advisors that are available 24*7 to you - they follow a set structure that is in line with your financial goals and don't get influenced by any emotions.
How do you benefit from robo investing?
Below are some benefits of robo advisory:
Overcomes Behavioural Biases: A human advisor may be biased when he recommends you something. On the other hand, robo advisors are pragmatic and help you create a financial plan to achieve your goals.
Easy to access and time-saving: Robo investment apps in India offer a user-friendly interface and are easy to use. You do not have to set aside time and meet financial planners. Also, you get to see all your investment in one place and regularly monitor it.
Cost efficient: When you plan your finances, you ignore the advisory cost. However, over the years, the advisory cost you pay every month (or year) will compound to a significant amount. However, robo-advisors come at a relatively lower price.
Which is the better option?
You must be wondering which is a better option - human advisor or robo advisor. Robo advisors have some advantages over human advisors. It includes quick response, fee structure, well-researched and unbiased recommendations, better record keeping, and much more.
The biggest advantage of a robo-advisor is that everyone can use it. Financial planners are used mostly by investors who have significant investment amounts. Anyone can take a robo-advisory service.
How to select a robo-advisory service/app?
Many companies have created a platform that provides robo advisory. Most use Artificial Intelligence and Machine Learning to help you with your investment. However, not all platforms are good.
The first thing you have to do is identify platforms that allow you to invest based on your risk profile and investment horizon.
Next, understand the platform, how it gives recommendations, and what goes in the background. Even if you are a non-technical person, you must understand the app - take help online or ask a friend to review the app and the technology. Finally, check the cost. The service should not be too costly.
Share your experience
Do let me know if you have used any technology-driven platform for investment - financial planning, stock selection, etc.
