Is America Ready for Evolved Robo-Advisors?

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Last year saw a rise in robo-advisors. While they might sound like Arnold Schwarzenegger’s Terminator character in a suit and tie providing financial guidance, robo-advisors are just online wealth management services that provide automated portfolio management based on an algorithm; unlike traditional wealth management, humans aren’t really involved and value added services like tax guidance and retirement or estate planning aren’t included.

The Pros and Cons of Robo-Advisors


Robo-advisors might be different but they aren’t necessarily bad. In fact, there are a number of pros to using them to help some manage their investment needs.

However, there are some considerations to weigh if you’re considering investing through a robo-advisor program. If you’re looking for financial advice, estate planning, retirement planning or tax advice, then they’re not for you. That’s also not to mention the fact that many do not have long track records to point to.

One robo-advisor that has been around for several years and has built a name for themselves is Hedgeable. As with any other investment option you consider it’s important to do your due diligence prior to signing up for their services.

Robo-advisors version 1.0 came on the stage a few years ago and have grown ever since. Robo-advisors tout low fees because of automated, ETF-based investing strategies, accepting clients with little money to invest and providing tax-loss harvesting as reasons to consider them. These features are positive developments for the financial industry, as prior the only individuals who could afford a financial planner were those with significant assets to manage.

Digital asset manager Version 2.0


Hedgeable is an example of a next generation robo-advisor. They provide all of the features of earlier robo-advisors without imposing a buy-and-hold mentality found amongst others.



The concept behind Hedgeable’s technology is to participate in market upside and stay away from market when it’s down. Declining stocks are replaced with rising stocks or put into safe havens when nothing good is available. This system may sound like market timing but it is a totally reactive system, relying on indicators and selling and buying securities in increments. In contrast, the buy-and-hold strategy employed by other financial planners tracks indices through the swings of the market.

What Hedgeable Offers


If you’re just starting out and are looking to begin investing with little money, they offer a free demo to help get your feet wet with their system in order to see if it’s something for you.

The fee for a Hedgeable account is a wrap and is based on the size of your portfolio. There are no hidden fees – everything is priced as indicated.



The sign up process is relatively simple and straightforward and should take you no longer than 10 or 15 minutes. After the system helps you determine your risk tolerance you are then placed into a wide variety of different investment options from Target Date funds to funds that focus on dividend paying stocks.

Hedgeable, when possible, tends to offer more ETFs as investing options than other robo-advisor style platforms have in the past. The benefit of that is a lower cost for you as the investor, generally speaking. Another thing which helps set Hedgeable apart is they now offer the ability to pay with and invest in bitcoin. It goes without saying that this does pose a risk that you need to be aware of, but is a good option to have if that’s something you’re looking for.

Investing in the stock market has evolved from the past which is a good thing for many investors. If you’re looking for a way to get some sort of management aspect as a way to help you get started or stay on track then a robo-advisor might be something you should consider.



Photo courtesy of: Perpetual Tourist

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I'm the founder of Frugal Rules, a Dad, husband and veteran of the financial services industry. I'm passionate about helping people learn from my mistakes so that they can enjoy the freedom that comes from living frugally. I'm also a freelance writer, and regularly contribute to GoBankingRates, Investopedia, Lending Tree and more.

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