Is it cheaper to invest using a roboadvisor as compared to hiring a financial advisor? - Seedly

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Asked by Anonymous

Asked on 15 Apr 2019

Is it cheaper to invest using a roboadvisor as compared to hiring a financial advisor?

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Explicit costs, most probably. Even if both platforms use the same underlying instruments, robos would charge lower AUA fees especially for bigger portfolios.

However, implicit cost, maybe not. Human advisors can add value by coaching you to stay invested and giving suggestions to top up your investments during a bear market, while robos won't really stop you if you panic and exit your positions.

Sometimes the latter can be a bigger reason for your overall portfolio gains.

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Sandra Teo
Sandra Teo
Level 6. Master
Answered on 16 Apr 2019

Hello!

Here is a blog post by seedly comparing roboadvisor and financial advisor!

https://blog.seedly.sg/choosing-a-financial-advisor-robo-advisors-vs-human-advisors/

Typically, roboadvisors are known to be cheaper due to the low management fees (many 0.50% or less) and low account minimums. This is great for millennials or people on tight budgets who cannot ordinarilty afford to invest.

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