Supporters say robo advisers have advantages that can deliver greater wealth for clients. Skeptics say people still want flesh-and-blood guidance.
Robo advisers can avoid human mistakes—but many investors say they want personal, hands-on service. Do investors need people anymore? The past few years have seen the rise of robo advisers, a category that includes not only fully automated investment services and advice but also “hybrids” that pair computerized services with hand-holding from human advisers. The firms generally offer passive investments, as opposed to the active management that a human adviser can provide, but they charge much slimmer fees. Robo advisers have been making aggressive moves lately, slashing the minimum balance required for an account; some have eliminated minimums entirely. Meanwhile, some big investment firms have begun offering hybrid services or are experimenting with fully automated offerings.