A ‘robo-advisor’ is more than just a machine

When people think of robo-advisors, they naturally think of automation. Since their rise in popularity over the last decade, digital wealth management services have provided an easier, cheaper, more accessible way for millions of people to invest. Many, however, have a poor understanding of what robo-advisors actually do, assuming minimal or non-existent human intervention. 

The reality for some digital wealth managers is slightly more complex. Moneyfarm is often referred to as a robo-advisor – a tag we’re proud of! – but every stage in our investment process is enacted and overseen by qualified, dedicated experts. Technology is used to streamline our processes and build robust portfolios, but at no stage is control fully handed over to a machine. 

If you want to try our tailored digital service for yourself, all you need to do is sign up and complete a quick survey about your preferences and your financial situation. Our technology will then assess your profile and assign you a no-obligation investment proposal based on your answers.

So, let’s take a look at what a robo-advisor actually does, as well as the structures we have in place at Moneyfarm to get the most out of the technology we use. 

What a robo-advisor actually does 

By harnessing the power of technology, the ‘robo-advisor’ element of Moneyfarm helps to automate parts of the investment process. Technology is used to reduce the complexity and lower the high costs often associated with wealth management, by helping our asset management team build and maintain effective portfolios.

We’ve created an algorithm that will match an investor with a profile in five minutes. All they need to do is answer a questionnaire on their attitude to risk – we then do the rest. This is one of the core facets of our ‘robo-advice’, the ability to assign appropriate portfolios to investors, regardless of their age or financial situation, at speed. 

Once we know their investor profile, we can pair our customers with a portfolio that’s built and managed in line with their appetite for risk. This portfolio is then regularly rebalanced to ensure it meets the set requirements of your investor profile. Technology is used here, too; the portfolios are assessed based on a number of criteria to ensure they remain fit for purpose. 

Of course, Moneyfarm also comes with a comprehensive digital platform, both via a desktop dashboard and a mobile app. This service is not unique to robo-advisors but it’s important that our investors can access and manage their accounts at the push of a button. 

The people behind the technology

At Moneyfarm, we employ a blend of technology and human expertise to manage our clients’ portfolios. Every decision taken by an expert is backed by algorithms and data, but machines are never directly in charge of the process. This is why we prefer the name ‘digital wealth manager’.

For our customers, there are three layers of human intervention in their investment process. The first is our Asset Allocation Team. These are our experts in what it takes to build a robust, effective investment portfolio that’s geared towards the long term. They monitor the markets daily to assess the performance of our model portfolios, making changes where necessary to protect our investors from unnecessary risk and to take advantage of potential opportunities. 

The second is our Investment Committee. Made up of members of the portfolio management team, leaders from the investment consultancy team, the Chairman and the CEO, the Investment Committee is primarily responsible for debating and approving any changes that affect our client portfolios. 

Finally, our customers have access to a fully qualified team of dedicated investment consultants. This means that, at every step of the investment journey, our clients can discuss their performance, their financial situation and their long-term financial plans with an expert. This is a crucial point of difference between Moneyfarm and what many people think of when they hear “robo-advisor” – it’s important that investors can access human guidance at the push of a button. 

If you want to find out how Moneyfarm’s unique take on the robo-advisor model could benefit your long-term financial future, you can get all the information on our platform here.