Choosing a Robo Advisor for Your Investments


The start of a new year is a great time to sit down and consider your financial situation. You can begin to set some goals for the months ahead in order to improve your finances in the areas of budgeting, saving and investing. When it comes to investing, it can be an overwhelming and intimidating area of finance for most people.

However, it is one of the most effective ways to grow either as small or as large an amount of money as you wish in order to provide the most beneficial return for you in the long run.

If you plan to start investing, the first thing you need to do is carry out some research. It is a thoughtful move to become more familiar with the vocabulary, concepts, strategies surrounding investment and select the best options available to you.

At this stage of gathering information, finding out about possible investment opportunities and all the possible ways to begin, you will most likely come across the words “robo advisor”.

What is the meaning of this term? A robo advisor is a digital platform that is able to provide automated financial strategies and plans with little or no human supervision. This service is based on computer algorithms and specific well-developed software that is capable of building your portfolio and managing your investments for you.

What is a robo advisor capable of doing


Creating your own portfolio can be a challenging task, especially if you are approaching this matter just now, without any previous experience. Building a portfolio requires solid knowledge in how to minimize the risks you might face and requires a certain amount of your time given over for its continuous management.

Technology can provide a helping hand in understanding where to invest, the worthwhile industries to choose, and how to best diversify your assets. It is in this situation that robo advisors come into play.

It is a good option if you want to get started with investing quickly and particularly if you don’t have a great budget to start with for the management. They offer a series of services, from the setup of your account to the creation and maintenance of your portfolio.

They can also provide solid goal planning and strong security features. It can provide availability of all these services to the clients at a lower price point when compared to the traditional form of a human financial advisor.

With most robo advisors you will not be paying the transaction fees, while with a regular brokerage account you would pay an amount for each transaction, whether you buy or sell.

Humans behind the computers


On hearing the term robo advisor, the easiest image that may come into our minds is that of a series of robots and computers following automatic procedures to make decisions related to investors’ money. However, it does not exactly operate like that. Among all companies operating in this field, Moneyfarm brings a human element to robo advice.

Behind each trade executed in the market and every customized plan based on clients’ goals, there is a dedicated team of professionals, with relevant expertise in economics and investments. The algorithm becomes a tool that is able to match the investor with an advisor, based on the data collected and the profile mapped out.

At the core of the company, there is the client’s interest, in fact, a team of consultants is always available to explain the strategies or any plan change, discuss the results and clarify any of the doubts you might have.

Initial phase, collecting your information


Once you have selected your robo advisor, the process starts from collecting your information. You will be asked about your goals, your financial situation, but also about your income, gender, any debt, and the level of risk you are willing to take on.

Planning your investments over a shorter or longer period of time is another important factor that will be considered. Based on your answers, the algorithm will start to examine your specific situation and analyze risks, objectives, and market trends.

After that, it’s time to pick and purchase the assets in order to build your portfolio. Digital platforms have the ability to elaborate customized strategies and adapt them according to changes in the markets, to counteract their volatility.

New abilities of robo advisors


The arrival of robo advisors has changed the game within the market. On the whole, they represent a new and fast-growing source of valuable and beneficial information. Up to now they had the ability to attract and bring to the table a new segment of investors, who were captivated by the ease of the operational process they provide, the limited costs to the customer and the results accomplished.

The improvements achieved over recent times have led to further new abilities. Nowadays, robo advisors can perform much more ambitious tasks, for example, elaborating on retirement planning or tax-loss harvesting. The constant analysis of the markets and the monitoring of the portfolio allows a frequent and coherent rebalance of the investments, in case it’s necessary.

These potential changes are usually based on rebalancing bands and as such they wouldn’t completely revolutionize your portfolio. Any changes would always be aligned to your original investor profile and your financial goals.


Investing is important for many reasons. It is the best way to receive a return on your money, in a much quicker manner than simply saving. It can help you plan better for your future financial security. It can also be the only way to outpace inflation and growing costs of living.

Admittedly, it can also be a complex field to understand. But, if it is something you wish to engage with now, as you can see, these tools can be the simplest way to get started. They provide an easy to access platform, with all aspects clear to understand where you can manage your money in a time and cost-effective manner. In the long term, you will see the benefits of spending time considering your finances.