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How automated investing could help you?

Numerous benefits accrue with robo advisors India. They are a perfect recipe for investors for an investor who is not in a position to manage their own portfolio, but lack the size to avail the services of a portfolio manager. Now what are the benefits you can avail by seeking the services of robo advisors?

Investing in a hands off manner

Doing it yourself is fairly easy said than done in spite of the internet supporting its cause. Even a lot of research based tools have emerged in the market making things easier. You can avail the services of a manager, but trust me you might be forced to shell out a major sum as commission. For an individual who has less money to invest robo advisors can be an apt solution. Than a human investment manager the fees levied are on the lower side.

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Lower fees

Human advisors end up charging around 2 % of the value of your funds traded. For a small portfolio the charges could even be higher. The fees are important as management is expected to reduce returns on your portfolio. An annual fee of 2 % could turn into 8 % on your total investment. This could have a considerable impact on your portfolio in the longer run. The fees that are levied by a robo advisor hardly have any impact on your returns in a long run.

Most of the funds charge a fund fee termed as expense ratio. This is to be separated from the management and you can term it as fund fees. These fees can vary significantly and should not be exceeding 2 %. This helps you to cut down on your fees and increase returns. Be aware of the fact that individual management advice might not yield the desired results in the long run. Some advisors may ask you to opt for higher priced funds as this would mean putting more money in their pockets.

Regular rebalancing

It would be just a matter of time where a well balanced portfolio could jump out of track. Any charges in your asset class toy with your fund allocation. For this reason your portfolio needs to be rebalanced on a regular basis. On a minimum you should undertake it once in a year as markets can double shoot their targets in just a matter of a few weeks.

Even if you do it you rebalancing might seem to be a difficult task. All the more so if you are having a diversified portfolio. If you are having a portfolio of 30 to 40 funds, or individual securities things are expected to be in a complete state of mess. Even to make  a change in individual security might be involving some type of transaction fee. This would mean things are going to be expensive in a hurry.

With a robo advisor you do not have to worry about such things. They are going to handle things for you and this is too on a regular basis.


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