Small startup businesses or organizations can’t hire actual financial advisors because these advisors, also known as wealth managers, can cost a lot. So, startups have a better alternative called Robo-advisors. The sole responsibility of this digital platform is to provide financial solutions. However, there are many Robo advisor app, and it may not be very clear to pick the best one. Hence, we will help you understand which Robo advisor will be good for you and your business.
Understanding the role of Robo advisor
First launched in 2008, this digital solution platform reached heights soon enough when the small companies started realizing its value and functions. Robo advisor does the same job as any other traditional financial advisor. They provide algorithm-driven and automated financial and investment services without any human supervision.
Features of a good Robo advisor
The best Robo advisor app in the market will offer the following features:
- No complication in the account setup
- Robust goal planning
- Perfect account services
- Portfolio management
- Customer support service
The Robo advisors have attracted a lot of users over the years due to their low fee. It does the same job as a human advisor but at a much lower cost. The platform is very cost-effective. The digital platform has no human interference; still, it gives the best output for half of the traditional advisor’s cost.
The best part about using a Robo advisor is that it is available for twenty-four hours. It will give service at any moment of day or night as long as the user has their internet connection on point.
Its low capital feature is another reason why startup companies or small businesses find themselves drawn to this digital platform. When any financial advisor asks for a minimum of a hundred thousand dollars initially, the baseline for some Robo advisor is only five thousand dollars. Few Robo advisors do not even have an account minimum. This is a huge beneficial point. Usually, when a startup establishes itself, their main investment goes into building their company’s name; later, they do not have much to consult an actual financial advisor.
How does Robo advisor function?
The digital platform uses the modern portfolio theory of any variant of it. The modern portfolio theory is used to create indexed and passive portfolios for their clients.
Robo advisor also uses rebalancing bands. It is used after the markets move to ensure that the asset class weighting portfolios are still maintained.
The Robo advisor is a great way to get a financial solution that includes advice and strategies and at an exceptionally low cost. It is the best alternative for small-scale businesses and the startup companies as well.