Robo Advisor – The “Keuirg” Baby Formula Dispenser
A few weeks ago a friend of mine introduced me to the Keurig of baby formula dispensing. Apparently there is a machine that will mix you a bottle of formula and works in the same way a Keurig coffee machine operates. Who knew! This definitely would have come in handy during that first month when baby needed a top up at 3am and I had to trudge down to the kitchen, mix a bottle of formula and warm it up in a bowl of hot water. They really have thought of everything under the sun to make our lives easier eh?
Robo Advisors are designed to make passive investing easier and cheaper. If you decide that you would like someone else to help you invest however you don’t want to spend a lot, why not have a computer do it for you? Robo Advisors are digital platforms that will invest your money for you. After you decide what your risk tolerance level is, what your investing goals are etc. the robo advisor determines a portfolio of stocks or ETFs. The robo advisor will automatically re-balance your portfolio.
What is the biggest benefit of robo advisors? They are much cheaper than using a traditional investment management professional. After all, the company doesn’t have to pay a human salary since a computer is doing all the work. If you are considering a robo advisor, one thing you want to ensure is that the company is insured and protected in case they go bankrupt or are hacked.
There are over 200 robo advisors in the United States. In Canada there aren’t that many, however here are the bigger players and more popular companies:
- BMO SmartFolio
- Idema Investments
- Just Wealth
- Modern Advisor
- Nest Wealth
- Responsive Capital Management
- Questrade Portfolio IQ
- Smart Money Capital Management
I will get to reviewing each company. Just like there are millions of gadgets out there to help us raise our kids, robo advisors are there to help make investing as easy and cheap as possible.