Taking on an investment portfolio today isn’t as complicated as it used to be. Nor does it require a lot of human intervention to get started.

Today, you can turn to robo-advisors to do most of the heavy lifting when it comes to building a sound and healthy investment portfolio.

But beyond that, robo-advisors are here to help you make sense out of your investment plans, with as little fuss as possible.

Still need a reason to jump onto the robo-advisor train? We’ll give you more than one, all of which make a strong case for the automated investment system.

Affordable entry fee and low balance

Affordable entry fee and low balance

Investing requires a substantial amount of capital - myth of fact? 

If you answered myth, you are definitely on the right track. Specifically, robo-advisors present a low-cost opportunity for you to start on your investing journey.

Similar to its human counterparts, robo-advisors usually charge an annual management fee.

The similarity, however, ends there. When it comes to the cost, you are looking at between 0.2% to 0.8% of your investment amount per annum.

With traditional advisors, this starts from 1.25%, which is already considerably higher than what robo-advisors charge on the higher spectrum.

Remember, investing isn’t just a one-off thing. You’re looking at a period of a few years. Now, consider the fees, which compounds as your portfolio grows. This is where a low management fee can make a difference, giving you better returns over the next few years.

The varying amount is dependent on your investment amount, so it stands to say that you are getting your money’s worth if you park more into the account.

But this does not mean you need to maintain a minimum balance, as is the case with Stashaway. Even if it’s required, the amount can be as low as $50, which is what robo-advisors such as Autowealth is asking for.

Minimal stress and time spent

For someone who’s holding a full-time job, you might see investing as a way to grow your wealth on the side.

But ask yourself, do you want to constantly monitor the market and feel your heart beating faster as the market swings against you?

This is where a robo-advisor comes in handy since it eliminates the stress of keeping a close watch at the market prices. In some cases, robo-advisors come with an integrated app that keeps you updated on how it’s handling your trade.

Robo-advisor dashboard

Thus, you can have a more hands-off approach towards investing using a robo-advisor. As far as you’re concerned, you only need to do the occasional checking via the dashboard while the robo-advisor executes the appropriate trades based on your profile.

Logical decisions and precise asset management

The premise behind robo-advisors is that you can let the system do most of the heavy lifting for you.

By heavy lifting, it means figuring out the appropriate assets to trade for optimal returns. While some might balk at the idea of being so hands-off, it’s practically the same as you would with traditional financial advisors.

We’re not exactly saying that a robo-advisor is much smarter than a human. But one has to consider the intricate algorithm it uses to realise that the thought process is more detailed and covers more bases than a human would.

At the very least, emotions are out of the picture with a robo-advisor. In contrast, a financial advisor might get jittery at a swinging market and make a snap decision. With a robo-advisor, logic and historic trades are the main focus, keeping your potential gains and risks in check.

This is equally true with assets. A robo-advisor is tasked to achieve optimal returns at various levels of risk. For example, Stashaway has an asset allocation framework that takes suitable assets into consideration rather than throwing everything into the basket.

Perfect if you are starting out with basic financial knowledge

You might know of exchange-traded funds (ETF) and various other assets. But how much do you REALLY know about them? Or for that matter, how do you even execute the trades?

Traditionally, you rely on a human financial advisor who bridges the gaps in your financial knowledge. In the case of a robo-advisor, its role is to both advise and consider all the assets that are available and find the optimal ones for your portfolio.

More importantly, robo-advisors take a personal approach towards what works for you. It requires you to input various data, mainly to have a better understanding of what makes you tick.

In doing so, the robo-advisor can tailor-fit a set of assets that optimises your returns based on your investment goals and acceptable risk levels.

Getting started with robo-advisors

Robo-advisors, as we’ve said, present a huge opportunity to up your investment game. From its low barrier to entry and ease of use, it’s a good starting point for investors of any level.

Plus, most robo-advisors still include real humans to ensure the algorithms are running as it should.

But at the end of the day, your investment portfolio is still highly dependent on what you’re comfortable with. Only you can determine whether a robo-advisor is right for you. Compare wealth management services on gobear.com/sg/lp/investment/robo-advisors.

GoBear team

Brought to you by GoBear Insurance Broker (SG) Pte. Ltd., a registered insurance broker with the Monetary Authority of Singapore