What is robo-advisory?
Robo-advisory systems refer to automated digital platforms that deliver financial management and investment advice with minimal human intervention. They collect information and use algorithms to translate a user’s risk preferences (e.g., conservative, moderate, aggressive), investment horizons (number of years the money will be invested, short-term vs. long-term), and financial goals (e.g., retirement, home purchase, or wealth accumulation).
What does it do?
Utilizing this data, the system will construct a personalized financial portfolio with a set of asset classes and specific weighting according to the user.
Example:
- • Stocks
- • Bonds
- • Real estate
- • Cash
Why we use it?
The major advantages of using robo‑advisors are lower cost and consistency with no emotional bias. However, people may also prefer the personal communication or do not fully trust with the digital system handling own investments, alternatively more suitable for traditional channels of obtaining financial advice.
