In our wonderful hi-tech world you now have the option of having a robot invest for you! We have been invaded by a group of R2D2 automatons who will direct you and your money towards the future.
It is very tempting to have someone else be responsible for investing your money, especially when you don't know whom to trust. But these online automated investment platforms present their own problems. They ask a series of questions to determine your goals, level of investing experience and time horizon (just like any financial adviser would). It is still your responsibility to ask questions and know what you're getting into. Caveat emptor - let the buyer beware!
Here are some things to learn before you commit your hard earned dollars:
1. Terms and conditions? What is the time commitment, required minimum sum to be invested, and what are the fees?
2. Investment choices. From what universe are the investments drawn? May they choose funds from ALL companies or promote only their own?
3. One size fits all. Garbage in, garbage out plays the same role here as it did in early computer programs. The robo adviser will only be able to make pertinent recommendations dependent upon what you tell it. Be as specific as you can to make sure your money is properly allocated.
4. Sensitive information. Keep your personal information protected! Be wary of scams that may trick you into providing confidential financial data.
5. The "In" thing. Know that as cool as hi-tech may seem, this may not be right for you. Before you send your money, check it out with friends and relatives. Read reviews.
R2D2 won't ask how your kids are doing nor talk about the latest sports or movies. You may miss the personal touch of a real-life adviser.
Be $ Smart - before you invest, protect your assets and research Robo Advisers (automated platforms) to learn the rules.
