The era of the Robo advisors is upon us. However, today you have the opportunity to use custom Robo advisors as well.
Rather than going with the readily available Robo advisors, it is better to go with the custom ones. The advantages of the same are numerous, which we will highlight below.
1. Customized strategy:
The number 1 reason you should go with a custom Robo advisor is to modify the investment and allocation. You can easily change the strategy according to your risk appetite and need for liquidity.
The customized strategy also minimizes the need for unnecessary risk. That way, you can create an investment strategy that suits you.
2. Flawless execution:
Many times, when you create an investment strategy, you might not be able to execute it appropriately. The reasons for the same are plenty.
• Lack of time:
To execute a strategy, you might have to monitor your prospective investments or current investments regularly. However, we all need to invest a considerable amount of time in our careers and businesses. That is why you might not have the time to execute your strategy.
• Emotional decisions:
Many times, when an opportunity stares you in the face, you might get scared because of the falling asset prices. Then too, you will not be able to execute your strategy.
However, when dealing with the custom Robo advisors, you won’t have any of these problems. The robo advisor will execute flawlessly according to the rules which you have set. In that case, you won’t have to worry about your emotions.
3. Little to no monitoring required:
It is not easy to monitor asset prices regularly. Even after you invest, you might not get the time to monitor your investments consistently. In that case, getting out of your investments at the right time becomes difficult.
The Robo advisors can create not only an entry strategy but also an exit strategy for you. That is why you will not require constant monitoring of your investments.
4. Low management cost:
When you hire a personal financial advisor, you will realize that they take a significant chunk of the corpus as fees. While this might seem small on an annual basis, you have to understand that you can easily remain invested for 7 to 10 years. During this period, the small percentage might eat into your returns significantly.
You won’t have this disadvantage when you go with the Robo advisors. That is because the management cost is a fraction of what standard financial advisors charge you.
5. Fraud protection:
When dealing with brokers and regular financial advisors, there is always the risk of fraud involved. The risk is of fraud or investing in an asset that is not suitable for you.
On the other hand, when dealing with custom Robo advisors, you set the rules. The Robo advisor will not deviate from these rules. That is why there is no risk of fraud.
When you look at these advantages in summation, you will realize that Robo advisors are superior to any other form of financial advice. If you’re in 2 minds regarding custom Robo advisors, you can certainly go ahead with them to make your economic life easier.
