Here’s Everything You Need To Know About Robo Advisory

Here’s Everything You Need To Know About Robo Advisory

Here’s Everything You Need To Know About Robo Advisory

Robo advisory is AI-powered automated financial planning, acting as a virtual advisor for investment decisions.

What Is Robo Advisory?

Robo advisory is a financial technology that leverages algorithms and artificial intelligence (AI) to provide automated, algorithm-driven financial planning services. In simple terms, it’s like having a virtual financial advisor at your fingertips, ready to assist with investment decisions.

The magic behind robo advisors lies in their ability to analyse vast amounts of financial data swiftly and make informed investment decisions. Investors typically begin by answering a series of questions about their financial goals, risk tolerance, and investment horizon. 

The robo advisor then uses this information to create a diversified investment portfolio tailored to the individual’s needs. Automatic rebalancing and portfolio adjustments ensure that the investment strategy aligns with the investor’s goals over time.

How Is Robo Advisory Different From Traditional Financial Advisory Services?

One of the key distinctions between robo advisory and traditional financial advisory services is the level of human involvement. While traditional advisors rely on personal interactions and expertise, robo advisors streamline the process through automation.

Robo advisors provide cost-effective solutions, often with lower fees than their human counterparts, making them an attractive option for tech-savvy investors looking for efficient and affordable financial advice.

What Are The Advantages and Disadvantages Of Robo Advisory Services?


  • Cost Efficiency: Robo advisors generally charge a lower fee compared to traditional financial advisors, making them an economical choice for investors.
  • Accessibility: Investors can access robo advisory services 24/7, providing flexibility and convenience.
  • Diversification: Robo advisors leverage technology to create diversified portfolios, mitigating risks associated with single investments.


  • Lack Of Human Touch: The absence of personal interaction may leave some investors longing for the human touch and expertise provided by traditional advisors.
  • Limited Customisation: Robo advisors may struggle with highly individualised financial situations, offering less customisation compared to traditional advisors.
  • Market Dependence: Robo advisors operate within the constraints of their algorithms, which may face challenges during unprecedented market conditions.

Are There Any Regulations For Robo Advisory?

Regulations play a pivotal role in ensuring the integrity and security of robo advisory services. Fintech startups entering the robo advisory space must adhere to regulatory frameworks established by financial authorities.

These rules encompass areas such as investor protection, transparency, and the use of advanced algorithms. Compliance is not just a legal necessity but a cornerstone in building trust with clients.