Investment: why s’help you to’a robo advisor ?

Asset management is generally complicated for savers, especially beginners. In addition to the financial risks, they are often confronted with management fees and the lack of visibility characteristic of the sector. The robo advisor makes it possible to limit these factors affecting the profitability of investments.

This type of service also offers personalized advice to individual investors.

What is a robo advisor and how does it work ?

A robo advisor is a financial advisory service to automate and personalize the investment strategy of investors. It is based on the investor’s objectives and risk profile to provide tailored recommendations. Thus, the relevance of advice is decisive to find the best robo advisor in France.

These players also distinguish themselves by the transparency of the pricing and the service.

The term Robot Advisor appeared in the United States in the 2010s to designate financial advisors using automation. It has however lost its “t” in the meantime. This singular spelling avoids pronouncing the “t” in English and marks the difference with “bots”. More than just a robot advisor, it is in fact a complete service combining algorithms and human specialists.

The idea is to maximize the efficiency of financial advisors.

In concrete terms, the automated part analyzes the market according to your investor profile. It then develops the best possible strategy for your risk appetite and goals. This service covers, among other things, the selection of promising investments and the constitution of a diversified portfolio.

The algorithm can also integrate various ethical parameters. Experts will nevertheless take over, on the analyses requiring the subtlety of human mind.

Why use this online advisor ?

The robo advisor combines all the advantages of FinTechs and AssurTechs. These terms refer to dematerialized players in the financial and insurance sectors respectively. Basically, the operators in question are defined by their ultra-competitive rates and customized services. They have indeed managed to reduce management costs and improve client knowledge through automation.

Robo-advisors use the same formula in the field of investment and wealth management. They make the capital of individuals and small investors grow by using artificial intelligence. Virtual financial advisors take care of the management of individual investments, asset portfolios and current transactions.

As a result, the experts intervene less on the less productive stocks. This system logically leads to lower management fees.

The advice offered is no less relevant than that of traditional financial advisors. Moreover, they are even optimized according to all the particularities of the saver. The AI can also take into account extra-financial criteria to invest in supports morally compatible with the user.

In short, the idea is to recommend the assets that the investor would have chosen if he mastered the functioning of the stock market.

How to make a successful investment ?

Like any financial expert, the robo advisor must be chosen wisely to succeed in its investment. The evaluation is based on the financial, legal and practical aspects of the service. In practice, the effectiveness of the virtual advisor is measured by, among other things

  • The level of profiling, the more details the AI asks about the saver, the more precise and adapted the recommendations will be;
  • The relevance of the arbitrations, resting essentially on the knowledge of the investor;
  • The type of offer (advised management, management under mandate, delegated management…) ;
  • The available investment supports;
  • Stock market products supported;
  • The history of the realized performances;
  • Management fees applied;
  • The reactivity of the assistance and customer service, essential for any online platform.

To succeed in the investment itself, it is important to respect the basics. The investor must favour diversification and securities compatible with his values. In this way, the investment can be carried out with complete peace of mind. Financial risks are diluted by the diversified portfolio.

On the other hand, responsible assets allow to avoid any risk of guilt.

Thanks to the automated advice, the investor is also protected from emotional reactions and rash decisions. AI also protects against the possible cognitive bias of human analysts. Finally, the robo allows to deal with passive funds of ETF type in an efficient and profitable way.