- What is a robo-adviser?
- What are the benefits and drawbacks compared to a human financial adviser?
- Is a combination of the two the future of financial advice?
The use of robots to carry out once time-consuming manual tasks continues to increase in our everyday world, but would you trust a robot with your savings? It's not as off-the-wall as it sounds!
The use of technology to improve customer experience and lower costs has been a slow journey but we are now seeing this accelerate rapidly as new tech-savvy businesses put pressure on more expensive traditional businesses.
The financial media is paying a lot of attention but what do you need to know about these so-called robo-advisers?
What is a robo-adviser?
Don't imagine C-3PO sat at a desk dishing out advice – that's not what a robo-adviser does.
A robo-adviser is actually a computer program, or algorithm, designed to work out what your personal finance needs are and develop a plan to help you achieve them.
Many so-called robo-advisers don't actually offer any advice, whereas a true robo-adviser, such as evestor, will.
This is done by building a profile of you based on the answers you provide to a series of detailed questions about your personal circumstances, such as your age, your earnings and your assets.
It will also ask you about your saving goals, which could be your retirement or a new home. And it will ask you about your attitude to risk. For example, to what extent are you happy to put your savings at risk in order to potentially generate better returns? It will then generate a recommendation based on your specific financial circumstances.
At evestor, we use complex algorithms – advanced mathematical formulas - to build and manage a bespoke portfolio of investments designed to achieve your financial objectives.
What are the benefits?
Using a robo-adviser can be seen as a win-win situation.
A human financial adviser is likely to charge you an annual fee of around 2.5 per cent of your total investment for their services, while evestor charges less than 0.5%.
That difference could amount to tens of thousands of pounds over the lifetime of an investment.
Despite that low fee, we still offer expert quality advice, invest with the biggest investment companies in the world and, of course, are authorised and regulated by the Financial Conduct Authority.
The best of both worlds
These days we are all used to dealing with our finances online and many of us use apps for everything from checking our bank balance to paying bills.
But there are occasions when it's good to talk things through with a human, even if it's just for reassurance.
Decisions about your financial future are important, and you want to be confident in the choices you make, so our advisers are on hand whenever you need them at no extra charge.
With evestor, you can book a free appointment with one of our financial advisers over the phone, weekdays from 9am to 8pm, or from 10am to 4pm on a Saturday.
Get all your questions answered. In plain English.