Investing
Investing
August 29, 2019
By Mary Beth Eastman

When Should You Switch to a Robo Advisor for Your Online Investments?

Simple. Thrifty. Living.

Over the last several years, you have probably heard about robo advisors that manage investment accounts without oversight from a professional. Robo advisors don’t work well for everyone, but they match the needs of certain investors perfectly.

If the following situations sound similar to yours, then you should think about switching to a robo advisor for your online investing.

Personal investment advisors cost a lot to hire. Robo advisors, however, have extremely low rates. Some robo advisors charge as low as 0.25% of your portfolio’s value.

Saving money means that you can dedicate more of your cash to growing your investments. Instead of paying someone to manage your accounts, you can put that money towards your portfolio.

Most robo advisors take a low-risk approach to investing. If you are nearing retirement, then it makes sense for you to use a low-risk robo advisor that will grow your wealth without putting your income in jeopardy.

The more money you have in your investment account, the more you spend on management fees. Paying a management fee doesn’t hurt you much when you have a relatively small portfolio. If you have more than $100,000, though, the fees can really hurt.

Instead of paying high fees for a person to manage your accounts, you can pay significantly less by letting a robo advisor do the job.

You have to set a few parameters when you open your online investment account with a robo advisor. After that, the algorithm does all of the work for you.

If you don’t want to think too much about investing, then a robo advisor is a great option for you. In most cases, your money will grow without any effort on your part. You just sit back and watch your portfolio’s value increase over time.

Robo advisors work well for a lot of people. If you’re curious, then you can start with a hybrid investment model that uses a robo advisor and gives you access to a professional advisor. Eventually, you will probably see that the robo advisor works fine on its own. Learn more about robo advisors with our guide to the best online investing sites.

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