A robo-advisor is a digital platform that provides investment recommendation♑s based on an individual's goals and preferences, a𒅌utomating the portfolio management services they might otherwise receive from a human advisor.

A brokerage account requires investors to choose and self-direct their portfolio activity. Brokerage accounts offer freedom and flexibility to 澳洲幸运5开奖号码历史查询:investors who want more active control over their 澳洲幸运5开奖号码历史查询:portfolios.

What Is a Robo-Advisor?

A robo-advisor is a digital platform that starts with an online questionnaire gauging an investor's preferences, 澳洲幸运5开奖号码历史查询:time horizon, and 澳洲幸运5开奖号码历史查询:risk tolerance. Since robo-advisors offer the added benefit of helping build and manage a portfolio, they generally come with higher fees than investors pay to access an online brokerage platform. Firms include 澳洲幸运5开奖号码历史查询:Wealthfront, 澳洲幸运5开奖号码历史查询:Betterment, and Empower. Fidelity offers 澳洲幸运5开奖号码历史查询:Fidelity Go, while Merrill Lynch has its 澳洲幸运5开奖号码历史查询:Merrill Guided Investing program.

An investor portfolio is created based on the individual's answers and the robo-advisor’s 澳洲幸运5开奖号码历史查询:algorithms. The robo-advisor manages the investment, 澳洲幸运5开奖号码历史查询:rebalancing the portfolio to ensure it maintains the optimal weightings of different assets to keep investors on track toward their goals. However, robo-advisors may only offer limited investment vehicles.

Robo-advisors stand out from standard brokerage accounts because of the additional 澳洲幸运5开奖号码历史查询:portfolio management services they provide. When investors use a 澳洲幸运5开奖号码历史查询:robo-advisor, they receive personalized recommendations from the firm’s proprietary algorithm to build a portfolio optimized to help reach their 澳洲幸运5开奖号码历史查询:investment goals.

Robo-Advisor: Advantages and Disadvantages

What Is a Brokerage Account?

A brokerage account allows investors to choose financial assets like stocks, bonds, mutual funds, and ETFs. The assets in the account belong to the investor, and if not in a 澳洲幸运5开奖号码历史查询:tax-advantaged account, the investor will have to pay taxes on any profits. An online brokerage account does not offer advice, and the in♉vestment decisions are entirely up to the investors.

澳洲幸运5开奖号码历史查询:Discount brokerage firms like Fidelity and Charles Schwab charge no platform fees for their accounts and even offer zero-commission trading on stocks and 澳洲幸运5开奖号码历史查询:exchange-traded funds (ETFs). However, even at these low-cost brokerages, there are higher fees to trade more complex instruments like futures and options. Financial giants like JPMorgan and Wells Fargo offer versions of self-directed online accounts alongside their more traditional investment adviso🌳ry services.

Various 澳洲幸运5开奖号码历史查询:brokerage accounts offer investors personal advice and investment management, including full-service brokerage that offers a wide array of services at higher costs. Those who want to keep fees low and wi𒊎lling and able to research and manage their investments typically tur🌳n to online brokerages.

Brokerage Account: Advantages and Disadvantages

The Bottom Line

Robo-advisors provide personalized recommendations to help investors build a portfolio, while self-directed brokerage accounts leave investment decisions to the individual. A robo-advisor offers investing management services without the steeper cost of a full-service advisor, without the flexibility to pursue unique or complex strategies. A self-directed account gives investors the autonomy and the responsibility of managing their portfolio.