What are robo advisors and why are they becoming popular among Z-gen investors?
For Do-it-yourself investors, robo adviosrs are an effective medium to make informed investment choices.
For Do-it-yourself investors, robo adviosrs are an effective medium to make informed investment choices. Robo-advisors are digital platforms that provide automated, algorithm-driven financial planning services. These platforms have little or no human intervention.
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Vijay Singhania, Chairman, TradeSmart and Vaibhav Jain, Head Advisor, Tavaga Advisory Services, spoke on robo advisors, do it yourself (DIY) investment strategy, their advantages and more in this 'Money Guru' show.
In case of regular investment in mutual fund schemes, there are advisors who suggest the proper investment strategy in exchange of money. Again, in case of online trading there are brokers to advise on the investments. All these are parts of an investment plan.
What are the advantages of DIY investment?
The generation Z is a tech-savvy and the strategy of DIY investment is quite popular among this class of investors.
"We have witnessed for the last five years that the DIY investment has been in trend and the young investors want to do the trading and built their portfolio on their own," Singhania said,
He also added that these investors are tech-savvy, well-informed and have the risk taking and management skill as they research on the portfolio of the companies on their own. Furthermore, this trend has been on the rise.
He further added that 80 to 90 per cent of the young investors are coming with the DIY strategy and they want to work with discount broking firm like TradeSmart as these firms all the rules of Sebi and the exchanges. In addition to that the brokerage cost is also very low in these firms.
Singhania also pointed out another advantage that by working with these firms, they get a clear picture of their portfolio and based on that they continue with their trading.
What are robo advisors? What are the advantages?
At present, there are also the robo advisors that help in the investment of an individual. Vaibhav Jain decoded the concept for robo advisors for the interested individuals. "In case of trading there are human advisors who advise you in case of an investment but in case of robo advisors this whole thing is done by technology," said Jain.
He further added that in case of robo advisory, the goal setting, the portfolio balancing and other tasks take place automatically with the help of technology without any human intervention.
While speaking about the advantages of this technology, Jain said, "The millenial investors are tech savy and so it is easier for them to get the whole portfolio information and all by simply logging in to an app or website. Moreover, as no human resource is involved in the process, the cost is also minimal."
With the robo advirors, an interested investor can simply continue with investing with the help of an app or website from home.
(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)
01:21 PM IST