Is Robo-Advice Right For You?

The allure of a set-it-and-forget-it, simple, low-cost way to invest has led to explosive growth for robo-advisor platforms. In 2020, assets managed by robo-advisors topped US$1 trillion and is expected to reach US$2.9 trillion worldwide by 2025.

Before deciding whether robo-advice is right for you, consider some pros and cons. 

PROS

LOWER FEES

Robo-advisors use exchange-traded funds (ETFs) that adopt a passive investing strategy. That is, they mimic a set of underlying indices. As such, investment managers overseeing ETFs don't conduct research to pick assets with the aim of trying to beat an index. They also trade these assets far less than an active investor would, so they charge the investor a much lower management-expense ratio (MER).