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What is a Robo Advisor


An Introduction

Illustration of how robo-advisors work

Robo-advisors can help put your money to work so you don’t have to.
Join us for a look at how robo-advisors work, and how they can be
personalized to help you meet your specific financial goals.

Robo-advisors are growing in popularity

Since their introduction nearly a decade ago, robo-advisors have become more mainstream with over 100 options now available. They have become popular with novice investors because they have low starting deposits and don’t require in-depth market knowledge. For experienced investors, robo-advisors can automate complex time-consuming activities like rebalancing and tax-loss harvesting.

Assets managed by robo-advisors (in billions)1

47.3 billion $ in 2015. 98.5 billion $ in 2016. 460 billion $ predicted in 2022

What is a robo‑advisor?

Personal Preferences: Time horizon, Financial goals, Risk tolerance

Robo-advisors vary from firm to firm, but are generally online services that provide automated portfolios based on your preferences.

Unpredictable Forces: Asset class performance, Market volatility, Market conditions

Robo-advisors weigh
personal preferences against unpredictable forces
to automatically recommend a portfolio
that fits an investor’s specific needs.

Personal Preferences: Time horizon, Financial goals, Risk tolerance. Unpredictable Forces: Asset class performance, Market volatility, Market conditions

How do robo-advisors work?

Each robo‑advisor is different but they
tend to operate in a similar fashion:

  • 1.  Complete a brief questionnaire to assess your risk tolerance and investment needs—anything from retirement planning to buying a new car.
  • 2.  The robo‑advisor automatically builds you a diversified portfolio of funds—usually selected by a team of investment professionals.
  • 3.  Experts regularly monitor market activity and every underlying investment to ensure your portfolio is rebalanced appropriately by a sophisticated algorithm—all so you don’t have to.
  • 4.  Some robo-advisors include
    access to a live consultant or Certified Financial Planner professional who can help prioritize goals and provide recommendations on how to reach them.
  • 5.  Log in to your account to track your progress, make adjustments, add contributions, and continue working toward new goals.

Are robo-advisors right for you?

As robo-advisors continue to grow in popularity, traditional financial advisors
remain available, as well as a combination of both approaches.

  • Ideal for a single
    investment goal
  • Stay on track to individual
    goals with automated
    portfolio rebalancing
  • Financial planning advisors
    usually not provided
  • Pay low fees plus automatic
    tax-loss harvesting
Robo + Traditional
  • Ideal for an automated portfolio
    created with professional guidance
  • Provides access to an online
    planning tool to help reach your
    long-term goals
  • Conveniently meet with an
    advisor via video chat
  • Pay moderate fees
    for occasional
    financial advice
Traditional Advisors
  • Ideal for more complex services
    such as estate planning
  • Develop a holistic view for
    assistance with all your
    financial accounts
  • Meet in-person with your
    dedicated advisor
  • Pay higher fees for dedicated
    attention and increased
    advisor availability

Think a robo‑advisor is right for you?

Learn more about what Schwab has to offer:

Schwab Intelligent Portfolios®
Our robo‑advisor builds, monitors, and automatically rebalances a diversified portfolio based on your goals. You can get help from Schwab professionals any time, 24/7.

Learn more

Schwab Intelligent Portfolios Premium provides all the features of Schwab Intelligent Portfolios, plus unlimited 1:1 guidance from a Certified Financial Planner professional, digital financial plan and interactive online planning tools.

Learn more

Ready to get started?

Open an Account

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Please read the Schwab Intelligent Portfolios Solutions disclosure brochures for important information, pricing, and disclosures related to the Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium programs.

Schwab Intelligent Portfolios® and Schwab Intelligent Portfolios Premium™ are made available through Charles Schwab & Co., Inc. (“Schwab”), a dually registered investment advisor and broker dealer. Portfolio management services are provided by Charles Schwab Investment Advisory, Inc. (“CSIA”). Schwab and CSIA are subsidiaries of The Charles Schwab Corporation.

Schwab Intelligent Portfolios® and Schwab Intelligent Portfolios Premium™ are designed to monitor portfolios on a daily basis and will also automatically rebalance as needed to keep the portfolio consistent with the client’s selected risk profile. Trading may not take place daily.