The best robo-advisors of 2017

Although they may sound like some weird sci-fi invention, robo-advisors are actually online investment platforms that use sophisticated algorithms to provide financial and investment advice. They do this based on the answers that are given to a fixed set of questions, such as what return you hope for or what level of risk you wish to be exposed to.

It is estimated that by 2020, robo-advisors will be responsible for managing approximately 10% (or $8 trillion dollars) of all global managed assets.

Advantages of robo advisors:

• Multiple services - can help optimise asset allocation, automate tax loss harvesting, rebalance portfolios, create retirement plans and manage tax returns.
• Lower fees - charges are generally between 0.25% and 0.5% of the portfolio value. This compares favourably to the average charge from a financial adviser of 1-2%.
• Lower minimum value - a very low minimum investment amount means that a wider range of people can access financial advice.
• 24/7 availability - as robo-advisors are software, they are always available, and you should be able to see a snapshot of your portfolio at any time (as long as you have internet access).

There is a multitude of financial advisor software out there, so if you would like to find out more about which might be most suitable for you, why not take a look at the website of a specialist, such as

Based on a number of criteria including cost, ease of use and extra features, there are two stand-out robo-advisors. These are:

Betterment, which charges a 0.25% annual fee and is best suited to intermediate level investors, retired investors and college students and Wealthfront, which also has an annual fee of 0.25% and is best for beginners and offers an easy learning curve.

Others that are worth considering are:

Charles Schwab - commission free and best for diversified portfolios. It offers automatic rebalancing and is tax efficient.

Vanguard - charges an annual fee of 0.3% is best for advanced users, tax savings and complex financial planning.

WiseBanyan - commission free, has no minimum balance requirement, and is great from a technology viewpoint.
Personal Capital - charges fees from 0.49% to 0.89% based on deposit amount/services used. Is best for retirement planning, investment tracking, and bill tracking/management.
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