These Days You Don’t Have To Be A Millionaire To Access Private Banking Services…

Even If Your Net Worth Is Not A 7-Figure Value, You Could Be Eligible For Private Banking and Wealth Management Services via an Automated Portfolio Offered via Robo Advisor Wealth Management or Robo Advisor Asset Management…

Over recent years there have been a number of “Digital” Banks that have broken into the otherwise staid Banking Sector. And by building a bank from the ground up that runs on architecture that is ready made to “plug and play” third party provider’s programmes, read Apps, these new generations of banks are able to offer their client “Robo Advising and Robo Saving” services that allow them to participate in the kinds of investment opportunities that were previously the preserve of Private Bank Clients, or those people who possessed sufficient capital and knowledge to seek out individual investment opportunities directly from the market.

Robo Advisor Definition

A robo advisor is an online, automated portfolio management service. Because these companies use computer algorithms — a set of rules to choose appropriate investments based on your risk tolerance and time horizon — they can offer robo advisor services for a fraction of the cost of a human financial advisor. That lower-cost management, combined with features like automatic portfolio rebalancing and tax-loss harvesting, can translate into higher net returns for investors. (Want to know more? Dig into the details of how robo advisors work.)

A robo advisor is a good fit for you if you prefer to be largely hands-off with your investments — letting someone else do the work of building and optimizing your portfolio — and you don’t have the kind of complex financial situation that requires a direct relationship with a human financial advisor. (If you’d rather be hands-on, read about how to invest in stocks on your own.)

Not sure which is the best robo advisor to choose? Here’s what you should consider:

Management Fees

This is what you’ll pay annually to have an account at a robo advisor. The fee, which is often assessed as a percentage of your assets with the advisor, is typically deducted from your account balance.

Why it matters: Any fee, including a management fee, reduces your return. If you’re earning a 7% annual return on your portfolio, and you’re paying a 0.25% annual management fee, your return is effectively 6.75%. Even small fees add up over time.

Expense Ratios

These are like management fees, only they’re paid not to the robo advisor, but to the investments the robo advisor uses. Mutual funds, index funds and ETF (exchange-traded funds) all charge this annual fee to cover the costs of running the fund.

Why it matters: Same reason as above: All fees eat into your investment return. You can’t avoid expense ratios as a fund investor, whether you invest through a robo advisor or on your own. But you can keep them down by choosing an advisor who uses low-cost funds. Knowing average mutual fund expense ratios can help you gauge whether you’re paying too much.

Account Types

Investment accounts fall into two general categories:

Retirement accounts, such as IRAs and 401(k)s. These offer tax advantages for contributions and often have rules about how much you can contribute and when, and how you can take distributions. Read more about retirement accounts.

Non-retirement accounts. Often called taxable accounts, there are no specific tax advantages for contributions to these, but they’re also not subject to contribution limits or distribution rules.

Why it matters: Make sure the robo advisor you choose manages the kind of account you want to open. Your account also helps determine which features apply to you — for example, tax-loss harvesting, discussed below, is only used on taxable, non-retirement accounts.


Most robo advisors use low-cost index funds and ETFs.

Index fund: A mutual fund that passively tracks an index or benchmark. A Standard & Poor’s 500 index fund, for instance, aims to mirror the performance of the S&P 500. Index funds attempt to follow the market, not beat it, and hold a group of individual investments, making them inherently diversified. Learn more about index funds.

ETF: Like an index fund, an ETF holds many individual investments and tracks an index or benchmark. The major difference is that ETFs trade on an exchange, like individual stocks, and can often be purchased for a lower investment than a full-fledged fund. Learn more about ETFs.

Why it matters: Be sure the advisor you choose offers the investments you want, and make sure those investments are low cost. A select few robo advisors add in actively managed mutual funds and individual stocks, or they customize portfolios completely.

Tax-Loss Harvesting

Tax-loss harvesting involves selling losing investments and using the loss to reduce or eliminate the taxes you’ll owe on capital gains. The IRS has plenty of rules around this — and the practice itself is fairly complex — so it’s a boon if a robo advisor is willing to do it for you. Here’s a full explanation of tax-loss harvesting.

Tax-loss harvesting can be harder with the fund portfolios that most robo advisors use — because index funds and ETFs hold a number of different investments, you can’t dial down to specific losers as easily. An index might be up overall but still hold investments that are down. Some robo advisors buy individual stocks to replicate an index, allowing them to sell specific losers.

Why it matters: It might not. Tax-loss harvesting doesn’t apply to retirement accounts, where taxes are deferred and capital gains taxes don’t come into play. It only applies to taxable accounts, where it might save you a significant amount of money.


A portfolio is fluid, and market fluctuations can cause the mix of investments you hold — called your asset allocation — to get out of sync with your goals. Rebalancing brings that allocation back to its original mix. Many robo advisors check for rebalancing opportunities daily and make portfolio changes when an allocation strays by a set amount — say, 5% or more.

Why it matters: When a particular asset class is doing well — let’s say the U.S. stock market is roaring — you could end up with more of your money in that class than you intended, due to outsize growth. If your original allocation was 50% stocks and 50% bonds, a portfolio that has shifted toward 70% stocks is probably too risky. Learn more about rebalancing.

Access To Human Advisors

Many robo advisors have merged computer-driven portfolio management with access to human financial advisors. The level of that access varies: Some services offer a dedicated advisor to individual clients; others offer only email or online chat with a team of advisors. As you can imagine, you’ll pay more for the former.

Why it matters: The financial advice industry has traditionally locked out small account balances. These services bring at least some level of human advice to accounts of any size. If you’re loath to turn things over completely to a computer, a hybrid service is a good middle ground. Here’s more about how to find the best financial advisor for you.

Socially Responsible Investing

Often called SRI, impact investing or values-based investing, this strategy is employed by investors who aim to align their investments with their values. Companies that promote social good are often included in SRI funds and portfolios; companies in controversial industries, such as guns or fossil fuels, may be excluded.

Why it matters: If putting your money where your values are is important to you, you’ll want to choose a robo advisor that offers investments that meet those standards.

The Solution – Professional Wealth Management

We offer a comprehensive solution to everyone who is interested in creating or enhancing an investment portfolio. It involves:

  • An audit of the individual’s existing investments or investment history
  • Where required – introductions to Robo Advisors, Banks, Hedge Funds, Family Officers, that might offer investment opportunities, credit and debit cards, and other premium services, normally only provided by Private Banks.
  • A risk assessment to establish a range of investments that are the best fit for that risk profile
  • A report with recommendations about potential investment targets of broader investment strategies that might be suitable

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