A robo-advisor is a digital platform that provides investment recommendations based on an individual's goals and preferences, automating the portfolio management services they might o🎃therwise 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官方开奖结果体彩网:investors who want more active control over their 澳洲幸运5官方开奖结果体彩网: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官方开奖结果体彩网:time horizon, and 澳洲幸运5官方开奖结果体彩网: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官方开奖结果体彩网:Wealthfront, 澳洲幸运5官方开奖结果体彩网:Betterment, and Empower. Fidelity offers 澳洲幸运5官方开奖结果体彩网:Fidelity Go, while Merrill Lynch has its 澳洲幸运5官方开奖结果体彩网: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官方开奖结果体彩网:algorithms. The robo-advisor manages the investment, 澳洲幸运5官方开奖结果体彩网: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官方开奖结果体彩网:portfolio management services they provide. When investors use a 澳洲幸运5官方开奖结果体彩网: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官方开奖结果体彩网: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官方开奖结果体彩网:tax-advantaged account, the investor will have to pay taxes on any profits. An online brokerage account does not off✅er advice, and the investment decisions are entirely up to the investors.

澳洲幸运5官方开奖结果体彩网: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官方开奖结果体彩网: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 acc𓆉ou🍬nts alongside their more traditional investment advisory services.

Various 澳洲幸运5官方开奖结果体彩网: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 willing and able to research andღ manage their investments typically turn 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.