Robo-advisors are automated platforms for delivering some of the best practices that human financial and investment advisors have developed over the years.
But how do robo-advisors actually work?
Each platform is different, but investing through a robo-advisor generally starts with a questionnaire about your goals, timeline and sensitivity to risk. Then the robo-advisor will pair you up with a curated portfolio that matches your needs and preferences.
But it doesn’t end there. Once you’ve funded the account, the robo-advisor continuously monitors your portfolio.
As the individual assets in your portfolio rise and fall along with the market, robo-advisors will look for opportunities to buy or sell investments, to keep everything in the proportions that will help keep you on track to achieve your goals.