Michael Ralby explains what robo-advisors do and how they fit into the finance industry today, as well as the benefits to using these services.

1. R O B O - A D V I S O R S :
W H O A R E T H E Y
A N D W H A T D O
T H E Y D O ?
MICHAEL RALBY

2. T H E F I N A N C E W O R L D
CONTINUES TO EVOLVE, AND ONE OF THE MOST SIGNIFICANT WAYS
IN WHICH THE INDUSTRY HAS CHANGED IS WITH THE INTRODUCTION
OF “ROBO ADVISORS,” A NEW SOFTWARE TO HELP MANAGE
INVESTMENTS.

3. W H A T I S A
R O B O
A D V I S O R ?
As implied by the name,
robo advisors are similar
to financial advisors, but
rather than utilizing the
services of another person,
the software takes its
place. These have been
rising in popularity in the
past several years, and
have become especially
popular with investors who
may be new to the
practice.

4. W H A T I S A
R O B O
A D V I S O R ?
Robo-advisors are also
helpful for people who do
not want to hire a financial
investor for whatever
reason. The expense of
hiring one may not be
feasible at the time, or
perhaps does not have the
time to continue with their
hands-on approach and
would prefer not to
manage their stocks
themselves.

5. H O W P R I C E Y
I S A R O B O
A D V I S O R ?
Regarding expenses, a robo-advisor
involves a service fee, as well as the cost
of the investments used. This can be
customized to the user, whether they
prefer to incur a fixed monthly fee, or
have the fee taken as a percentage of the
investments. Many software programs
offer a free trial before being charged, to
give the user a period of time to adjust to
the functionality.

6. First, robo-advisors are software
programs; they do not have
emotions and are therefore
incapable of making decisions
based on emotions. This allows for
fewer, if any, costly investing
mistakes.
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Additionally, the robo advisor
process is all automated, and
therefore less stressful. The user
truly does not need to be involved
to have a successful portfolio, and
there is no need to worry that an
investment will be made by
emotion alone.
2
W H A T A R E T H E B E N E F I T S ?

7. A R E T H E R E A N Y
D O W N F A L L S ?
There are certainly disadvantages to using a robo advisor as opposed
to an actual person. It depends on what the user needs in terms of
finance. Robo advisors do not work as financial planners, and there is
the loss of personable interaction that comes with meeting someone
face-to-face. Some programs allow for growth projections, but the
software does not advise the user on allocating investments or
anything similar, like retirement planning, come the time for
withdrawal. The degree of assistance varies from program to program,
as well, although none of them are as hands-on or available to talk
through questions that may come up.

8. L I K E W I T H
A N Y T H I N G
it makes sense to research the best
options ahead of time, and there are
plenty out there to explore. For some,
robo advisors are the right choice, and
for others, they may not be. Find what
works best and get started.

9. T H A N K S F O R
V I E W I N G !
Visit Michael at his website: MichaelRalby.com