Robo-advisors are AI-driven platforms that provide automated, personalized investment advice, making portfolio management accessible without the high fees of traditional financial advisors. Betterment uses AI to analyze factors such as age, income, and risk appetite to suggest asset allocations, then automatically rebalances the portfolio as market conditions change. Nutmeg similarly asks users about their financial goals, risk tolerance, and time horizon, and uses AI to create customized portfolios that are regularly adjusted, with real-time performance updates.

Key points

Robo-advisors automate financial advice and portfolio management, replacing traditional face-to-face advisory services with algorithm-driven solutions.
Betterment personalizes portfolio recommendations by considering age, income, and risk appetite, and automatically rebalances investments to keep them aligned with long-term goals.
Nutmeg builds customized portfolios after users answer questions about goals, risk tolerance, and time horizon, then adjusts those portfolios as market conditions evolve.
Both platforms provide real-time updates and continuous management, making investment strategies efficient and low-cost for ordinary users.

What are robo-advisors and how do platforms like Betterment and Nutmeg use AI to provide investment advice?