What is a robo-advisor? | Vanguard

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Robo-advisors harness the power of technology to automatically build and manage your portfolio. They can be a great solution for investors who don’t want to spend a lot of time and effort doing financial housekeeping tasks like adjusting to markets or rebalancing. This short video can give you an idea of ​​whether a robo-advisor might be a good fit for you. And if you decide to go with one – well, there Is One we’re rather liking.

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You may have heard the term “robo-advisor” before. As more and more people are turning to their phones and tablets to handle their finances, it is a term that is getting a lot of use. But what are robo-advisors, and what do they do? Here’s an overview that can help you decide whether a robo-advisor might be a good fit for your life and finances.

Robo-advisor is an online platform that manages your investments automatically. This is financial advice that comes from an algorithm rather than a person, and it can take a lot of time, guesswork, and stress to own a portfolio.

When you sign up for a robo-advisor, it will ask for basic information about your goals, risk appetite and the length of time you stay in the investment.

Then the technology suggests a portfolio for you—but it doesn’t stop there. A robo-advisor also makes the actual investments for you, and it will manage those investments over time, rebalancing periodically to make sure your asset mix stays on the right track. All behind the scenes, all by itself. It’s great when you think about it.

A robo-advisor can be a great option for those who don’t want the stress of keeping up with the markets or managing their own portfolio. You can set it and forget it, or set it and check in as many times as you want. You get the peace of mind that comes from knowing that your money is working hard for you, without having to spend all the time and effort doing everything yourself.

Robo-advisors come with another benefit. They often charge lower fees than traditional financial advice services, and you can usually start investing with a low initial deposit.

There are hundreds of robo-advisors out there, and not all of them are alike. That’s why it’s important to research and compare options to decide what works best for you. Robo-advisors share one important thing, though—they’re created to give you the time and freedom to focus on the things in your life that matter most. After all this is your journey.

important information

All investments are subject to risk, including the potential loss of the money you have invested.

The services of Vanguard Digital Advisors are provided by Vanguard Advisors, Inc. (“VAI”), a federally registered investment advisor. VAI, The Vanguard Group, Inc. (“VGI”), and an affiliate of Vanguard Marketing Corporation (“VMC”). Neither VAI, Digital Advisors, VGI, nor VMC guarantees profit or loss protection. For more information, please review Form CRS and Vanguard Digital Advisor Brochure at vanguard.com/digitalbrochure.

© 2021 Vanguard Group, Inc. All rights reserved.

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