The first roboadvisers appeared in the United States in 2008, in the midst of one of the most devastating financial crises in the history of this country. “Friends and relatives asked me then what to do with their money,” recalls American roboadding pioneer John Stein (Betterment). «I could not advise them on a good ready-made solution, so I decided to come up with one.» Ten years later, in 2018, Stein’s automated investment platform Betterment had already managed $ 14 billion. All this is funds of individuals who decided to entrust their savings to smart algorithms. Moreover, many of those who use Betterment services have never tried to make money on the stock markets before.
According to forecasts, in the coming years, clients of investment platforms like Betterment and Russian
The services of portfolio managers around the world are available to few. Professional investment consultants rarely start working with clients who are not ready to invest in securities in the equivalent of less
It takes much less money to start working with a roboadvisor. For example, in the United States, you can invest in securities using a smart platform with only a couple of thousand dollars in your pocket. And the Russian roboadvisor
It is imperative to meet with a live portfolio manager in person and tell him about your plans and financial tasks for a long time. This is followed by a long stage of selecting suitable investment assets and agreeing on different options: what exactly to buy and in what proportions. All this usually lasts several days and is accompanied by a stormy correspondence.
It takes a roboadvisor literally 15 minutes to create an investment portfolio. For this, the client does not need to go somewhere and talk to someone for a long time. It is enough to go to the site. The program will ask 10-15 mandatory questions, and then, within a split second, will select the assets that best meet the client’s goals. And you can immediately invest in these assets: service
Portfolio managers’ commission, which they charge for services, is usually 2-3% of the value of the investment portfolio. Plus transaction costs. Plus a commission for success. Roboadvisers ask for much less for their work and are cheaper for the client than professional managers. This happens thanks to the automation of the entire process. Unified service commission
In a critical situation, when markets fall, stocks fall in price, and clients lose money, a professional portfolio manager, like any living person, can succumb to fear and make a mistake. The most common: in a panic, sell all the client’s assets, fixing a loss, instead of having patience and calmly waiting for the markets to recover and go up, and the securities will rise in price again.
A roboadvisor will never make such a mistake. It is built on algorithms and strictly follows them when it selects and manages assets for the client. A smart robot dispassionately monitors the state of the markets and acts strictly according to the rules. For example, once a quarter, it rebalances the client’s portfolio: re-brings the client’s portfolio to optimal proportions.
By the way, the algorithms used by roboadvisers are based on «portfolio theory». For its development in 1990, the authors — economists Harry Markowitz, James Tobin and William Sharp — received the Nobel Prize. That is, the work of smart investment platforms is based on serious scientific developments. Don’t be afraid to trust them. Roboadvising is fast, convenient and reliable.
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