Robo Advisors

Robo Advisory in Trading and Investment

Introduction

Robo Advisors are the latest wave of technology retail investors can take advantage of to gain an edge when creating a profitable portfolio. Somewhere around £1 billion in assets is already managed by them in the UK, while over in the U.S. this figure has already surpassed $50 billion and is quickly rising.

KPMG forecasts that by 2020 there will be a tenfold increase to $500 billion of assets under the management of robo advisory services, just in the US. It can be expected that the increase in the UK could well be even higher as percentage growth, coming from a lower base.

The uninitiated may be picturing a humanoid robot in a suit and tie doling out advice and instruction. The reality is a little less sci-fi. Robo Advisors simply automate the client profiling and number crunching traditionally done by human financial advisors analysing the market to put together investment portfolios.

Topics covered in this Guide

  • Robo Advisors: the Future of Retail Investment Advice
  • Robo Advisor Profiling
  • Is this automated approach to investor profiling accurate?
  • How a Traditional Financial Advisor Chooses Portfolio Components
  • How a Robo Advisor Chooses Portfolio Components
  • Narrowing Difference
  • Robo Advisor Limitations
  • Robo Advisors Augmented by Human Input
  • Does it Work?
  • Are Robo Advisors Cost Effective?
  • Conclusion

 

 

 

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