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Robo Advisor types in India

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A Robo-advisor is an online wealth management service that provides automated portfolio management advice based on algorithms without the use of human, financial planners.

Simply put, we can say that Robo Advisor is an automated advisory system or online portal based on the advice of algorithmic trading robots. It means that online investment services can be enjoyed. Furthermore, without much human intervention, you can easily manage your portfolio.

No doubt, it is run by humans on the backend who control these systems based on software.

Robo advisors are platforms that are highly technical and professional. They help to develop your long-term investment plans as well as short-term investment plans based on your financial long-term and short-term goals.

Also, Robo Advisors attract young investors and helps them manage their investment goals through their stable algorithm trading and diverse online investment opportunities.

To provide specific investment advice, an investment advisor must be accredited by the Securities Exchange Board of India (SEBI). An entity, partnership, corporate body, or even a company can apply for registration as an investment advisor. Like other investment advisors, these Robo advisors are also required to follow SEBI guidelines and follow its rules.

How they work – 

Robo Financial Advisors help build your investment portfolio based on a few critical criteria:

  • Investors age
  • Your risk profile
  • Your financial aim
  • Your investment requirement
  • Risk-adjusted performance
  • The amount of surplus to be invested, etc.

Such online finance platforms provide a wide range of services. Nevertheless, mainly, they give you a large pool of investment options for mutual funds. Others may give you a limited set of funds developed by their algorithm pre-selected while others can provide a wide variety of mutual funds, ETFs, bonds and investments in tax savings.

Robo Advisor types in India

Autopilot: Various options are available to choose from, depending on your needs.

Direct Plans based: They provide options to choose from a specific scheme. So, you can get the choice of both DIY or Do it yourself and decide to invest according to your financial goals.

Goal-based advisors: The investment option in this class of robot advisors is based on the information you have. It means that you are getting essential advisory services from such Robo advisors or some additional services. These help you choose the funds you want and focus on the allocation of structured assets.

Full-service advisors: These advisors are responsible for providing complete financial advice, not just a platform for mutual fund sales. You also serve as a complete package for your personal finance, tax, tax planning needs.

For example: If you want to invest in mutual funds, these Robo advisors will focus your investment on algorithms explicitly built for this purpose. Different Robo advisors may, therefore, suggest specific funds to invest based on their algorithms for similar goals.

Note: With the help of these online advisors, you can also start SIP in mutual funds. Above all, you are directed to meet your investment needs.

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