The methods of requesting and providing financial management and consulting services are constantly evolving to try adapting to the specific needs of the environment in which they operate.
Over the last few years, to meet these needs, new figures have begun to establish themselves in the financial landscape: the automated investment advisors more commonly known as Robo Advisor.
What are Robo Advisors?
They are financial consultants who deal with online portfolio management through algorithms and with minimal human intervention.
I searched the web for the most correct definition for Robo Advisor and in the end it is nothing more than digital platforms that offer investment advisory services in an automated manner without the traditional interaction of the financial advisor.
How do Robo Advisors work?
Once customers have chosen the reliable platform, they will select the most appropriate investment strategy for them by filling in online forms in which they will specify the objectives to be achieved and their risk profile, at this point the algorithms will be able to profile the right type of customer and then offer customized investment portfolios suited to your needs.
Like human financial advisors, the Robo Advisor also makes use of the analysis of historical data to be able to formulate its investment recommendations, even if there is no guarantee that past performances can have certain predictions for the future.
Not all online Investment Platforms make full use of Robo Advisor, but use business models that differ on the basis of the human component expected in the process of providing the consulting service.
So it ranges from an almost absent human presence whose role is limited to simple monitoring and control of the entire process up to a real presence of a human consultant who supports his client in real time.
The digital Asset Management platforms in which an algorithm works and manages the customer's investment portfolio is called: Human4Robo Advisor, it is the algorithm that selects the most suitable products for the customer based on a basket previously defined and configured by human advisors.
When the phases of costumer profilization, the identification and modeling of the strategic configuration of the portfolio take place in an automated manner, we can speak of Robo4Human Advisor, the human consultant is entrusted with the task of looking after the portfolio and checking the level of performances.
If the digital Asset Management platforms are managed by human consultants who make use of algorithms and technologies such as Artificial Intelligence for the costumer profilization, then we are talking about Robo4Strategy Advisor, the task of the algorithm is to elaborate the questionnaire filled in by the customers to understand their investment goals.
In the Online Advisor, the role of algorithms is a minority and marginal, in fact it is the human consultant who guides and supports users in their investment process.
Of course, each of us remains free to choose which investment platform to rely on, the super-automated one or the one that is mainly based on a human consultant, but I am convinced that although we are living in the era of Artificial Intelligence, the human element should never be questioned, indeed it must maintain an important role linked to the control of the decisions taken by the platform, over which it must carefully monitor.
We are inventing a New Financial World so why not combine the potential of Robo Advisors and Human Skills together to find the best result?
Traditional financial systems are obsolete, they need to be modernized but not totally replaced, this is where the positive characteristics of Robo Advisors come into play, namely their rational logic, total transparency and a specific methodology, will help to create advanced services suitable for all types of wallets, at all ages, available at any time because the internet world never sleeps and above all they will be services based on transparency in which all costs are clear from the beginning of the investment.
All seasoned with a little bit of emotional component .. q.s.
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