People looking to invest money and make financial investments often turn to third-party services for lack of time and / or knowledge. Thus, savers turned to their banks or portfolio management companies. But an alternative digital offer exists: the robo advisor , or robo -advisers. What is it about ? Answers in this article.
What is Robo Advisor? Robot Advisor Definition
A robo-advisor , also called robot-advisor , is a digital platform that provides automated financial management services, based on algorithms, with little or no human supervision. The robot advisor collects information from its clients about their financial situation, future goals and risk profile through an online survey, then uses this data to offer investment advice and make investments automatically.
Robo advisors thus offer a completely automated savings and financial investment service , and generally at lower fees than what traditional banks, portfolio management companies offer, and are generally even cheaper than online banks. Most robo advisors offer investment solutions through life insurance contracts, and place investors’ money in ETFs (exchange traded funds, or continuously quoted investment funds ) according to profiles and customer goals.
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Basically, these robo advisors created by FinTechs were used exclusively by portfolio management professionals, but subsequently, they were democratized and opened directly to savings clients. This made it possible to reduce costs by eliminating the intermediary of the management company.
Indeed, the advent of robo-advisers has completely changed the game by offering this service directly to consumers. After a decade of development, robot-advisors are now able to manage more sophisticated decisions, allowing efficient investment. The industry has grown explosively as a result. Client assets managed by robot advisers are expected to reach $ 7 trillion worldwide by 2025.
The Best Robo Advisor for 2022
Robo advisors offer you the possibility of supporting you in the management of your investment portfolio, but not all robo advisors offer the same services and the same characteristics. Here is a comparison of the best robo-advisors.
eToro: Easy to use platform, ideal for beginners
eToro is an online broker launched in 2007, quickly becoming a major player in financial markets around the world. Today, it is notably the world leader in social trading networks, with several million registered users.
The eToro platform is highly secure, while still being very user-friendly and easy to use for first-time investors. It also offers advanced services like CopyTrader and CopyPortfolios, social trading offers, which make eToro an excellent choice for starting trading.
In addition, eToro enables the trading of a large number of financial markets, including stocks, stock indices, currencies, commodities, cryptocurrencies, as well as ETFs. Zero commission equity trading, and the ability to buy physical stocks and cryptocurrencies, in addition to CFD trading, are also important benefits that investors can enjoy.
- Regulated, reputable and well established broker
- Intuitive and easy to use platform, ideal for beginners
- No hidden costs
- Large choice of financial instruments
- Social and collaborative trading with CopyTrader and CopyPortfolios
- Excellent customer service
- Lack of research and analysis center (filled by social trading)
- Lack of advanced trading tools
Nalo: Tailor-made robo advisor
The robo advisor Nalo was created in 2017 with the idea of a financial investment advisor company totally independent from any financial institution to reduce conflicts of interest. In particular, Nalo places financial innovation at the heart of its business. Its investments are rigorous and result from a scientific approach.
Nalo is a member of ANACOFI, a professional association approved by the Autorité des Marchés Financiers ( AMF ). Registered with ORIAS as an Insurance Broker, activity regulated by the Prudential Control and Resolution Authority (ACPR).
Nalo offers investments for financial objectives, such as a real estate purchase, retirement, building up security savings, preparing a transfer or simply building up capital. The robo advisor thus offers investments in equity index funds, bond index funds and guaranteed capital funds, as well as life insurance and green investment in eco-responsible companies and renewable energies.
- Tailor-made investment by objective
- Green investment offer
- Private advisor from 250,000 euros of managed savings
- Slightly high management fees of 1.65% per year on average
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Yomoni: The first regulated French SGP robo advisor
Launched in 2016, Yomoni is one of the only robo-advisors with portfolio management company (SGP) approval. It is therefore approved and regulated by the Financial Markets Authority (AMF) and the Prudential Control and Resolution Authority (ACPR). Yomoni has a capital under management of nearly 250 million euros in 2020 and a customer base of more than 21,000 investors. Among its investors, it counts prestigious names such as Crédit Mutuel Arkea and Weber Investissement (led by the founders of Financière de l’Echiquier). Yomoni offers investors investment solutions in life insurance, securities account and PEA (share savings plan).
Yomoni’s management fees are set between 0.8% and 1.6% of the total invested per year. The minimum amount to invest is 1,000 euros.
- Well established and renowned French robo advisor
- Regulated in France by the AMF and the ACPR
- Very responsive customer service
- Limited instruments
- Complex operation for a novice
WeSave: Robo advisor, Amundi subsidiary
WeSave is a Financial Investment Advisor (CIF) created in 2012. Crédit Mutuel Arkea and Amundi have long been its loyal partners, before Amundi became the sole shareholder in 2019. Thus, WeSave is today a subsidiary of the prestigious group Amundi, a global player in portfolio management, approved by the AMF. Crédit Mutuel still remains an important partner in insurance.
WeSave offers multi-vehicle life insurance and multi-vehicle capitalization contracts. The robo advisor also offers the possibility of investing in real estate through real estate investment companies (SCPI) in a 100% digital way.
Wesave’s management fees are set between 0.8% and 1.6% of the total invested per year. The minimum amount to invest is only 300 euros.
- Subsidiary of the Amundi group
- Possibility of investing in SCPIs online
- Award winning customer service
- Minimum amount of 300 euros
- Only 2 investment contracts
Advize: Robo advisor from 500 euros
Advize is an independent company, insurance broker and financial investment advisor, members of the CNCIF, which has been in existence since 2012. The Advize offer was voted best internet contract, best balanced profiled management, best dynamic profiled management, best multi- diversified internet media in 2017 according to the robo advisor.
Advize offers two life insurance contracts. The first is accessible from 500 euros and offers more than 80 funds and ETFs with reduced fees of 1.45% per year. The second is a luxury formula from 30,000 euros of investment, offering more than 200 funds and ETFs and fees higher by 1.6%.
- Reduced fees on the My Sentinel Life contract
- Investment from 500 euros
- Little diversified offer