Robo-advisors: are they any good?

I’m trying to find a broker with a good robo-advisor service, can you help me find and compare them? I don’t want to spend much time on thinking about individual investments, would rather rely on smarter experts/robos.
Are these services useful, any good in your experience? Or are they not too useful, or too expensive? Which is the best one out there?
Thanks for any insights.

Hey there,

thank you for your question. Excellent question. There are two options that suit your preferences:

  1. Use a robo-advisor that difersifies among ETFs based on your preferences. The costs are usually somewhere between 0.5%-1% per year. Finax is a popular robo-advisor in the EU (https://www.finax.eu/), but the fees are really high: 1.2% per year.
  2. Use social/copy trading services at brokers. Here, you can copy other investors’ trades. The risks are higher than at robo-advisors as the copied investors usually invest into products other than ETFs. A great broker for social trading is eToro (https://brokerchooser.com/broker-reviews/etoro-review). In terms of costs, it’s great because the stock fees are commission-free.

In my opinion, robo-advisors are expensive compared to the value they add. The strategy that many robo-advisors provide can be automatized in your investing strategy to some extent. For example, you can use recurring investments into equity ETFs and you don’t need to deal with doing the transaction every time. This approach will lack the rebalancing feature of some ETFs, but cheaper because of the fees charged by robo-advisors.

Some broker that are great for this approach:

If you have any questions, please let me know.

Best,
Adam

Thanks for the detailed answers Adam!
Any thoughts in Revolut’s new robo-advisory? Is it worth checking out, how does it compare to others?