While investing can be a rewarding hobby for some people, most Australians find the prospect of managing their own investment portfolio risky, time consuming and emotionally exhausting.
It used to be almost impossible for most Australians to seek professional help to invest due to the high fees and account minimums required to get personal investment advice. However, technology has fundamentally changed the investment industry, making it more accessible, affordable and honest. Automated investment services like Stockspot have opened up access to professional investment expertise and made investing in a global portfolio accessible to everyone.
To help investors understand the different investment options available, we’ve created an infographic that explains the 3 main types of service Australians can choose from when getting professional help with investing:
1. Traditional advisers
2. Technology-assisted advisers
3. Automated investment services
Differences in “robo-advice”
As more companies adopt technology to improve their efficiency, the term “robo-advice” is getting more coverage in the media to describe both technology-assisted advisers and automated investment services. Investors should be aware of the differences when deciding who they use for professional help to understand the service they’ll be getting – one is akin to a bookstore with a website whereas the other is more like Amazon.
Automated investment services like ours make use of technology for the entire investment advice and management process to maximise benefits to investors. We use algorithms to build and manage an investment portfolio tailored to each client, taking into account their financial goals, investment time frame and aversion to risk. Investors get access to a professionally managed portfolio of low-cost index funds diversified across different assets and markets, with lower risk than just investing in a single market.
The entire process is online to make it easy for people to start investing – there is no paperwork, no need to be an expert, and no need to constantly watch your portfolio. Whenever a client’s personal circumstances changes, we review their financial situation to ensure that their investment strategy stays relevant. This means our clients can have peace of mind that their investment strategy is suitable for where they are in life, their goals, timeframe and personal risk profile.
How does automated investing compare?
Compared to a typical managed fund offered through an traditional financial adviser via a platform, automated investment services have the advantages of a seamless online experience, lower costs, greater transparency as well as potential tax efficiency benefits.
Compared to DIY investing in shares, services like ours automates many of the tasks you would need to be doing yourself to effectively manage your own investments, including fund selection, portfolio allocation, rebalancing and reinvestment. This is why it can be better for some people to be investing on autopilot.
More information about financial advice can be found on ASIC’s MoneySmart website.
Low fee, hassle-free investing
Stockspot is Australia’s fastest growing automated investment service. We can help you build and manage a personalised portfolio tailored to your financial situation and your goals. With Stockspot, there’s no paperwork, no need to be an expert and no hassles.
Image: James Loesch via Flickr
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