Are Robo-Advisors Worth It? What Are The Alternatives?

Are Robo-Advisors Worth It? Discover the Alternatives!

Robo-advisors are a type of automated financial advisor that relies on algorithms to create investment portfolios for clients.

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They may not be right for everyone, and there are some drawbacks you should consider before deciding if robo-advisors are worth it for your situation.

Are Robo-Advisors Worth It?

Yes, robo-advisors are worth it if you want to automate tax-loss harvesting & low-cost access to ETFs and mutual funds, saving you money. They also provide automatic portfolio construction, rotation & adjustment based on your risk and preferences. Finally, they also offer model portfolios for socially responsible investing.

Robo-advisors are worth using if you want the following services. Many robo-advisors are tuned for optimal tax-loss harvesting, which saves you money. They are also optimized for automatic portfolio rotation & adjustment based on your risk and preferences, saving you a lot of time. They also provide low-cost access to ETFs and mutual funds, thus reducing trading costs. Some robo-advisors offer model portfolios to socially responsible investing or gender-specific demands, saving time researching the companies you want to invest in.

Are Robo Advisors Worth it?
Are Robo-Advisors Worth it?

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Also, a robo-advisor has no emotional attachment to a particular investment. Thus, it could sell a money-losing favorite faster. Hence, the lack of a human touch can be a good thing for investments.

In contrast, many people value a relationship with an advisor and the insight they can bring. Therefore, your investment style determines whether a robo-advisor will work for you.

There are many advantages to robo-advisors: they can offer small investors a higher level of service at a lower price. On the other hand, robo-investment is a new field with many risks. Thus, research robo-advisors carefully before you entrust one with your money.

[Related Article: Top 10 Robo Advisors Review]

Are Human Financial Advisors Worth It?

On the other hand, a person with a poor understanding of the markets and little time to devote to investments could benefit from the human touch. Beginning investors usually learn a lot from a human advisor, particularly one willing to explain the process.

Conversely, the human touch is hard to quantify and value. For instance, a human advisor can make you feel better. However, a dishonest human advisor is strongly incentivized to lie or exaggerate to make money from commissions or fees.

One of the greatest strengths of robo-advisors is their honesty and impartiality. For instance, a Robo Advisor makes no commission on sales. Thus, a Robo Advisor has no incentive to recommend a particular investment or withhold negative information.

Robo-Advisors Are Not Worth It If You Want To Beat The Market

Most robo-advisors do not beat the market or even try to. From our research and performance comparison of over 20 Robo-Advisors, it turns out that M1 Finance offers a great mix of performance and investment services. Read the M1 Review.

Most robo-advisors are focused on efficient tax-loss harvesting, portfolio balancing, and structuring based on your risk tolerance and preferences, which is mostly OK if you want lower risk and do not want to manage your investments actively.

Robo-Advisor Alternatives

Try a Tested Investing Strategy

If you seek to outperform the S&P 500 index, there are better alternatives to robo-advisors. One option is the Market Outperforming Stock ETF System (MOSES), and another is the LST Beat the Market System.

Learn Investing

Another alternative is to learn to find and invest in stocks yourself. There are many reputable training courses available on the market today. However, to find and time the purchase of shares in great companies to try to beat the market, you will need a complete education in Fundamental Analysis and Technical Analysis, including portfolio and risk management. We happen to have that very course available. Learn more about the Liberated Stock Trader PRO – A Complete Stock Market Education.

Take a Free Investing Course

Finally, you can try to go it alone by using our Free Stock Market Training series, which includes Finance Books, MoviesAudiobooks, and even our Podcast so that you can educate yourself.

Should I Use A Robo-Advisor?

Yes, robo-advisors are great if you don’t have the time or inclination to research and manage your investments. They use an automated system to manage your portfolio, rebalancing it according to market changes. However, they also charge a fee for their services, so research before signing up!


Learn More About Robo Advisors With Our 12 Part Q&A Series

1★ What is a Robo Advisor & How Do They Work? 7★ Are Robo Advisors A Good Idea? 8 Advantages Uncovered
2★ Hybrid vs. AI vs. Robo Advisors 8★ Are Robo Advisors Worth It? What Are The Alternatives?
3★ How Do Robo Advisors Really Work? In 7 Steps 9★ Do Robo Advisors Beat The Market? Fund Performance Uncovered
4★ A Hybrid Robo Advisor- What Is It & How Do They Work? 10★ Are Robo Advisors Safe? Security of Assets Examined
5★ Robo Advisors vs. Human Advisors 11★ Top 10 Best Robo Advisors [160 Point Review & Comparison]
6★ Top 20 Best Robo Advisor Returns & Fees Comparison 12★ Review Winner M1 Finance


10 Best Robo-Advisors Tested & Compared 2024