A financial advisor is a person who helps with your finances. They are often paid by the hour and don’t give advice for free. They can help you manage your investments, retirement planning, and taxes. You should work with someone who has experience in these areas if you’re going to make big decisions like getting life insurance or buying a house.
On the other hand, robo-advisors are online services that provide investment advice at a low cost (sometimes free). They do this by using computer algorithms that create portfolios based on your risk tolerance and goals—for example, saving for retirement or making money right now through investments like stocks or bonds. Robo advisors usually don’t take clients under age 18 because they don’t have any assets they can invest yet (like their own money or things bought with their own money).
Robo Advisors charge a flat fee for their services, while Financial Advisors charge a percentage of assets under management.
The choice between the two depends on your financial goals and risk tolerance. For example, if you have a small amount of money in your investment account and want someone to manage it on an ongoing basis, then hiring a Robo Advisor would be better because it will cost less than hiring a Financial Advisor who charges by the hour or percentage of assets under management. If you have more than $50,000 invested in stocks and bonds or mutual funds, then hiring an experienced Financial Advisor could make sense because they offer their expertise at no extra cost beyond their initial consultation fee (which may be waived if you open an IRA account).
Robo advisors and financial advisors both invest your money, but they do it in different ways. An investment Robo advisor will use computer algorithms to make investment decisions for you. Financial advisors use their judgment to make investment decisions for their clients.
One advantage of using a Robo advisor is that it’s often cheaper than having a financial advisor manage your investments – especially if you have large sums of money or are looking to save on fees by investing in low-cost index funds and ETFs (which most Robo advisors will allow).
As mentioned above, the level of service between the two is vastly different. While Robo advisors might not be able to answer some of your questions or concerns, they will give you a recommendation on what to do with your money. This can be especially helpful if you are starting out and don’t know where to go for advice.
As per the experts at SoFi, “Robo advisors can also help you with tax planning, estate planning and retirement planning since they have access to everything that’s going on in your life–your income streams, investments and spending habits.” Robo advisors streamline these processes by pulling data from all over the internet (your bank statement information) into one place so that you can see everything at once instead of having to look through multiple sources yourself (like when looking at each individual account).
bbcinsiders advisors and robo-advisors are similar in that they offer financial advice to their clients . But there are some key differences between the two types of advice that can make one more suitable than the other.