Robo Advisors are automated programs that provide financial guidance and investment advice online without human intervention. It uses a fixed rule set for offering investment advice. Robo Advisors are generally suitable for “Do it yourself Investors” or new investor who don’t want to spend money for availing investment advice. To use this platform you need to input various parameters such as investment amount, duration and other details.
How Robo Advisor work?
Robo Advisor works on a pre-defined algorithm. It gives output on a screen based on input and predefined logic. The logic is designed by humans. The algorithm and logic are modified from time to time based on market condition and performance.
Every advisor platform is different, however, they generally start with asking questions about goals, timeline, and risk. Based on answers given by advisor platform display recommended investment. Once you invest your money, it monitors your investment portfolio.
The difference between the traditional financial advisor and Robo advisor are given below.
|Traditional Advisor||Robo Advisor|
|Expensive||Low Cost or Free|
|Manual Process||Automatic Process|
|Slow in Response||Nearly Realtime|
|Individual Skills Matter||Algorithm & logic matter|
|Less Risky||Risky in nature|
From the above comparison, one can easily say that advisor platforms are more beneficial. However, investments made via advisor route is risky.
Benefits of Robo Advisors
Low Fees – The first benefit of the robo advisor is cost. It is a low-cost solution and cheap compared to the traditional advisor.
Easy Access – It is very easy to access advisor platform. It is online and accessible anytime anywhere.
Low or Minimum Investment requirement – One can use this facility online without any cap on low or minimum investment requirement.
Unbiased – These type of advisors are not biased by any specific products.
Human Error – You can eliminate human errors by using an advisor platform.
Self-check – You can change various input by self and check the impact on portfolio before investing money.
Who should use Robo Advisor
Robo advisors are recommended under the following situation.
- You are Tech Savvy and you know how to use online tools and support.
- You are “DIY” (do it yourself investors) and comfortable to let someone else do all your investing.
- Your risk-taking capacity is high and you don’t need direct contact with the financial advisor.
- You understand the impact and fees associated with online advisor platforms.
- You don’t have a budget to meet the minimum requirement of a traditional advisor.
Best Robo Advisor in India
Funds India is one of the best robo advisor platform in India. The name given to advisor by Funds Inda is Money Mitr. Money Mitr offers high-quality, personalized investment advice. You can use money mitr for various investment goals such as building wealth, retirement, children education etc.
After login you need to enter investment amount, period and risk level. This platform automatically design your mutual fund portfolio. It is claimed to be free platform.
Scripbox is next in the list of best robo advisors. Scripbox platform is easy to operate. It does not require any login. You need to set right financial goal and provide various inputs. It provides you option for SIP, wealth building, tax saving and achieving financial goals.
The scirpbox is also available on mobile android platform. It is free to use simple and fast platform. You can rely on the investment advice offer through this platform.
5 Paisa offers one of the best robo advisor platform. 5 Paisa advisor is also known as auto investor. It is very easy to use 5 Paisa. You just need to enter your financial goal and profile. It will be used to know your risk profile. Once you input the detail you will get recommendation on screen.
Once recommendation is given it will prompt you to open online account. If you don’t have account you will not able to see recommendation.
Goalwise is goal based direct mutual fund investing platform. It is completely free zero commission platform. It is data driven unbiased mutual fund selection platform that offers higher returns. You need to sign up before using this platform.
You will get mutual fund recommendation, report card, end to end goal based investing and live chat option under this platform.
Arthayantra is one of the oldest financial advisor platform in India. Arthayantra assess your current status, get input about your goals and try to assess risk profile. You will get financial advice based on inputs. It will also offer custom built portfolio for your investments. You can also use this platform for making investment. It is somewhat complex platform compared to others.
I hope above list of best robo advisor will help you in making a right selection. In addition to above advisor list you can take a look at other popular online advisors such as BigDecisions, ZIPSIP, Kuvera etc.
Disclosure – I have tried to get advice from most of the above platforms. However, I have not invested based on the advice offered by them.