Based on our research of experts and various public sources in the Robo-Advisor field, we have highlighted the major shortcomings for your consideration:
What You Need to Know About Robo-Advisors
- An investor cannot define investment parameters.
- Contact methods with live individuals are limited.
- Frequent rebalancing may increase fees and taxes.
- Short-term performance history.
- Lack of down-market performance data.
- Limited planning and goal setting.
- No face-to-face meetings.
- Large allocation of assets to emerging markets.
- Higher credit risk in bond portion through exposure to junk bonds.
- Lack of standardization for asset recommendations across similar risk categories.
- Will not dissuade you from imprudent moves with your portfolio.
- Does not offer recommendations on what steps to take for wealth building.
- No personal touch.
- Fees may be higher than what you think.
- Other cost effective options may be available.
- No guarantees, regardless of what they claim.