I am planning to avail services of a Robo advisor to manage money. Does this have any reason to worry?


#1

I am planning to avail services of a Robo advisor to manage money. Does this have any reason to worry?


#2

Robo advisors are popular in the western world where Robo advisors are already handling management of assets worth $19 billion. Robo money management software allows you as a customer to set your preferences allowing the algorithms to take all money related decisions as per your goals. While Robo advisors are safe and secure, unlike human wealth advisors who offer many value added services, a Robo wealth advisor strictly offers the best options for the financial advice and nothing more.


#3

Hi Reba,

Robo advisors are essentially wealth management companies providing an automated support for all financial advisory services without any human intervention. Be it trading, investment, portfolio rebalancing or tax saving, the robo advisors can help investors without any human interference. It works with a pre-defined algorithm and analytics, and calculates the best returns and plans for each individual as per his requirements and preferences.

In India, automated financial advisory services are provided by companies like Scripbox, MyUniverse, Arthayantra, BigDecisions and FundsIndia.

The basic level service is offered by companies like Scripbox, which assists mutual fund investors in designing their portfolio. For example, Scripbox recommends the best mutual fund picks for investors from its basket, using algorithms. So, if you are choosing a long term investment, they will automatically direct you to the best picks in equity. Or, if your intention is tax saving, it will direct you to the best picks in tax saving funds. One can also make investments through them and receive automated portfolio based suggestions through mail.

Since Robo money management tools are based on pre-defined algorithm support, they offer limited customization as of now. Therefore a human wealth advisor may give better suggestions on some new products which are not added to the algorithm of the Robo wealth advisor.

Also, Robo services do not offer flexibility and decide the best route depending on your individual goals. It does not count for any financial emergency that may lead to a situation where you are likely to withdraw funds from your investment.

Another disadvantage is that unlike human wealth advisors who offer many value added services, like investment advice for real estate and other channels, a Robo wealth advisor strictly offers the best options for the financial advice and nothing more.

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Cheers,
BB Expert


#4

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