Robo-advisor (robo-adviser)

Loading the player...

What is a 'Robo-advisor (robo-adviser)'

A robo-advisor (robo-adviser) is an online wealth management service that provides automated, algorithm-based portfolio management advice without the use of human financial planners. Robo-advisors (or robo-advisers) use the same software as traditional advisors, but usually only offer portfolio management and do not get involved in more personal aspects of wealth management, such as taxes and retirement or estate planning.

BREAKING DOWN 'Robo-advisor (robo-adviser)'

Robo-advisors are typically low-cost, have low account minimums, and attract younger investors who are more comfortable doing things online. The biggest difference is the distribution channel: previously, investors would have to go through a human financial advisor to get the kind of portfolio management services robo-advisors now offer, and those services would be bundled with additional services.

Below is a list of several robo-advisors:

AssetBuilder

Betterment.com

Covestor

Edelman Financial Services

Financial Guard

FlexScore

Folio Investing

FutureAdvisor

Hedgeable

Jemstep

LearnVest

MarketRiders

Motif Investing

Motley Fool Wealth Management

Nutmeg.com

Personal Capital

RebalanceIRA

Schwab Intelligent Portfolios

SigFig

TradeKing

Vanguard VPAS

Wealthfront

WiseBanyan

RELATED TERMS
  1. Wealth Management

    A high-level professional service that combines financial/investment ...
  2. Money Manager

    A business or bank responsible for managing the securities portfolio ...
  3. Advisor

    1. The person or company responsible for making investments on ...
  4. Financial Adviser

    A professional who helps individuals manage their finances by ...
  5. Private Banking

    Personalized financial and banking services that are traditionally ...
  6. Investment Management

    A generic term that most commonly refers to the buying and selling ...
Related Articles
  1. Financial Advisor

    Advisors: Don't Mix Robo and Traditional Services

    Here's why it makes sense for financial advisors to offer traditional and robo-advisor services separately.
  2. Financial Advisor

    Is A Robo-Advisor Right For You?

    A robo-advisor is an automated service that provides algorithm-based portfolio management.
  3. Retirement

    One Vital Area Where Robo-Advisors Fall Short

    Although publicized as an investment panacea, robo-advisors may fall short on personalized diversification.
  4. Financial Advisor

    5 Robo-Advisor Predictions for 2016

    One of the fastest-growing sectors within the financial services industry, robo-advising will see many changes this year. Here's what we're likely to see.
  5. Financial Advisor

    Are Robo-Advisors an FA's Worst Nightmare?

    Understand how robo-advisors present an opportunity for traditional financial advisors to enhance their practices and service levels to clients.
  6. Retirement

    Robo-Advisors: How to Pick the Best One for You

    Looking to simplify your investing life? We've sifted through some of the top robo-advisors to help you choose the one best for you.
  7. Financial Advisor

    Should You Trust a Robot to Manage Your Money?

    Robo-advisors offer several benefits, but should investors trust a computer to manage their investments?
  8. Financial Advisor

    Why Robo-Advisors Might Not Last as Independents (AAPL, SPY)

    Robo-advisors are likely here to stay. But will the current crop of start ups get swallowed by big players?
  9. Financial Advisor

    Top Questions to Ask When Choosing a Robo-Advisor

    Think a robo-advisor might be the right choice for you? Be sure to ask these questions first.
  10. Retirement

    Robo-Advisors: Focus on Features to Choose the Best

    The right robo-advisor is the one that fits your wallet and your investment philosophy. In most cases there’s more than just one, so here's a little help.
RELATED FAQS
  1. How do I choose between an independent CFP and a trust CFA portfolio manager?

    I need to choose between an independent, reputable, and vetted CFP who is trustworthy and a trust CFA to manage my investment ... Read Answer >>
  2. What is the financial services sector?

    Go beyond banks and credit unions to learn about the diverse group of companies that make up the fast-growing financial services ... Read Answer >>
  3. What distinguishes the financial services sector from the banks?

    Learn about the difference between the banking industry and the financial services sector and how to distinguish financial ... Read Answer >>
  4. What should you take into consideration when choosing a portfolio management service?

    Understand several important issues and considerations when evaluating and choosing a potential portfolio manager and why ... Read Answer >>
  5. Under what circumstances would I require private wealth management?

    Learn why many high-net-worth individuals may prefer private wealth management services, and understand how these firms charge ... Read Answer >>
  6. Which are the most popular mutual funds that target the financial services sector?

    Discover some of the most popular and highest rated mutual funds offered that hold stock portfolios in the financial services ... Read Answer >>
Hot Definitions
  1. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  2. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  3. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  4. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  5. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
  6. Enterprise Value (EV)

    A measure of a company's value, often used as an alternative to straightforward market capitalization. Enterprise value is ...
Trading Center