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Questions You Should Ask Before Hiring a Robo-Adviser – William Schantz

Questions You Should Ask Before Hiring a Robo-Adviser - William Schantz

Are you thinking about hiring a robo-adviser to help manage your investments? It can be a great way to save time and money while still managing your finances in an effective manner. Before you jump in and sign up for advice from Artificial Intelligence, it’s important that you know the questions to ask yourself and the service provider before making any decision on which robo-adviser is right for you. In this blog post, William Schantz discusses crucial questions that everyone should consider when deciding if using a robo-adviser suits their needs. Read on to find out more!

William Schantz Lists Questions You Should Ask Before Hiring a Robo-Adviser

1. What is the cost structure? It’s important, as per William Schantz, to understand exactly what you are paying for the advice and services that a roboadviser offers. Be sure to ask about any additional fees or charges associated with their services, including account minimums. You should also inquire about how often pricing may change in relation to portfolio performance or other factors; some roboadvisers only charge when there is a transaction or rebalancing taking place. For example, Vanguard’s Personal Advisor Services charges 0.3% of assets on portfolios over $50,000 per year plus an average fee of $20 per trade on portfolios up to $5 million dollars.

2. What type of expertise and experience do they offer? Make sure you are comfortable with the level of experience and expertise a roboadviser offers. Ask about their credentials, any certifications they may have earned, and how long they have been in business. Additionally, find out how many clients they serve and if other individuals at the firm can provide assistance as needed. For example, Betterment has over 600,000 customers globally who collectively manage over $15 billion dollars in assets through the platform, having started operations back in 2010.

3. What types of investments do they offer? All roboadvisers, as per William Schantz, offer various types of investment options to choose from; these may include stocks, mutual funds, exchange-traded funds (ETFs), bonds, and more. It is important to understand which strategies a roboadviser employs and if they have any limitations on the types of investments available. Additionally, inquire about their asset allocation strategies and how much risk they are comfortable taking in relation to your goals. For example, Wealthsimple offers a variety of ETFs from domestic and international markets with different levels of risk, allowing customers to select from conservative portfolios all the way up to aggressive investments, with stocks comprising more than 90% of holdings.

William Schantz’s Concluding Thoughts

According to William Schantz, robo-advising is rapidly becoming a popular option for investors looking for an automated approach to portfolio management. However, it is important that you do your research and ask the right questions before selecting a roboadviser; this will help ensure that you get the most out of your investment experience and remain secure in the process. According to Investopedia, the average annual return for robo-advising services is 7.2%, with an estimated 1 million users worldwide and $112 billion in assets under management. Moreover, a 2020 survey from Finder reported that 81% of respondents felt more confident about their investment decisions after utilizing a roboadviser. Taking the time to ask these key questions will help you make an informed decision and ultimately achieve your financial goals with ease.