---
title: "Robo Advisors – What are they? | Financial Advisors Blog"
description: "Is a Robo Advisor right for you? Man or machine? Which financial advisor is right for you? Robo Advisors – automated online platforms that create…"
url: https://financialadvisors.com/blog/robo-advisors-what-are-they/
---

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# Robo Advisors – What are they?

February 14, 2020

![Close-up of a humanoid robot with glowing blue features](https://financialadvisors.com/_emdash/api/media/file/01M31E05JZTBRPFF41PJV8S36Z.jpg)

**Is a Robo Advisor right for you?**

Man or machine? Which financial advisor is right for you?

Robo Advisors – automated online platforms that create investment portfolios and financial plans for individuals through computer models – have been grabbing an increasing share of the financial advisory business. Indeed, many traditional firms, including Morgan Stanley, JP Morgan Chase and Goldman Sachs, have already begun or are planning to offer their own robo advisor services to some of their clients, potentially competing with their own human advisors.

Robo Advisors are definitely attractive to many people, as they provide their services at a lower cost, with lower minimum investment requirements and greater convenience than traditional advisors offer.

**But that doesn’t mean they’re right for every client!**

Like the saying goes, you get what you pay for!

Robo Advisors
_Pros_
● Low cost – Usually 0.25% or 0.5% of assets annually. Some charge a monthly, quarterly or annual fee
● Automated portfolio selection and rebalancing
● Low minimum investment: $0 to $5,000, depending on the company
● 24/7 online service
● Quickly getting more sophisticated, including tax strategies
_Cons_
● One-size fits all
● Limited investment options, usually mutual funds and exchange-traded funds only
● No personalized service, although some firms offer hybrid models
● Not designed for complicated financial strategies or financial emergencies

Traditional advisors
_Pros_
● Individualized investment and financial plans
● Personalized service – “the human touch”
● Offer a wide variety of services, including retirement planning, legacy planning, accounting, taxes, insurance, business divestment and strategies, and more
● Wide variety of investment options, not limited to public securities
_Cons_
● High costs – 1% of assets annually is common
● High minimum asset requirement – often $500,000 or more
● Often available only during business hours

**Next steps**
As you can see, both methods have their advantages and disadvantages. But before you decide, talk to one of the **Financial Advisors** listed on our site and see what’s best for your situation.

**About the Author:** Jim Eckel, CFP is President of FinancialAdvisors.com – a marketing platform for indepedent investment and tax and accounting advisors in addition to weatlh technology companies who provide services and products to the independent advisor.

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