In fintech, a robo-advisor typically refers to an automated digital investment service that uses algorithms to build, manage, and rebalance a portfolio with little human involvement.

What it usually does

  • Collects information like your goals, time horizon, income, assets, and risk tolerance through an online questionnaire.
  • Suggests or manages an investment portfolio based on that data, often using low-cost funds such as ETFs.
  • Aims to offer investment advice at lower fees and with lower account minimums than traditional advisors.

In plain terms

It is basically an app or online platform that tries to automate investing for you, rather than replacing every kind of financial planner.

TL;DR

A robo-advisor is an automated investment platform that uses software to help choose and manage investments, usually cheaply and with minimal human help.