An Introduction

Illustration of how robo-advisors work

Robo-advisors can help put your money to work so you don’t have to.
Join us for a look at how robo-advisors work, and how they can be
personalized to help you meet your specific financial goals.

Robo-advisors are growing in popularity

Since their introduction nearly a decade ago, robo-advisors have become more mainstream with hundreds of options now available. They have become popular with novice investors because they have low starting deposits and don’t require in-depth market knowledge. For experienced investors, robo-advisors can automate complex time-consuming activities like rebalancing and tax-loss harvesting.

Assets managed by robo-advisors1

47.3 billion $ in 2015. 98.5 billion $ in 2016. 460 billion $ predicted in 2022

What is a robo‑advisor?

Personal Preferences: Time horizon, Financial goals, Risk tolerance

Robo-advisors vary from firm to firm, but are generally online services that provide automated portfolios based on your preferences.

Unpredictable Forces: Asset class performance, Market volatility, Market conditions

Robo-advisors weigh
personal preferences against unpredictable forces
to automatically recommend a portfolio
that fits an investor’s specific needs.

Personal Preferences: Time horizon, Financial goals, Risk tolerance. Unpredictable Forces: Asset class performance, Market volatility, Market conditions

How do robo-advisors work?

Each robo‑advisor is different but they
tend to operate in a similar fashion:

  • 1.  Complete a brief questionnaire to assess your risk tolerance and investment needs—anything from retirement planning to buying a new car.
  • 2.  The robo‑advisor automatically builds you a diversified portfolio of funds—usually selected by a team of investment professionals.
  • 3.  Experts regularly monitor market activity and every underlying investment to ensure your portfolio is rebalanced appropriately by a sophisticated algorithm—all so you don’t have to.
  • 4.  Some robo-advisors include
    access to a live consultant or Certified Financial Planner professional who can help prioritize goals and provide recommendations on how to reach them.
  • 5.  Log in to your account to track your progress, make adjustments, add contributions, and continue working toward new goals.

Are robo-advisors right for you?

As robo-advisors continue to grow in popularity, traditional financial advisors
remain available, as well as a combination of both approaches.

  • Ideal for a single
    investment goal
  • Stay on track to individual
    goals with automated
    portfolio rebalancing
  • Financial planning advisors
    usually not provided
  • Pay low fees plus automatic
    tax-loss harvesting
Robo + Traditional
  • Ideal for an automated portfolio
    created with professional guidance
  • Provides access to an online
    planning tool to help reach your
    long-term goals
  • Conveniently meet with an
    advisor via video chat
  • Pay moderate fees
    for occasional
    financial advice
Traditional Advisors
  • Ideal for more complex services
    such as estate planning
  • Develop a holistic view for
    assistance with all your
    financial accounts
  • Meet in-person with your
    dedicated advisor
  • Pay higher fees for dedicated
    attention and increased
    advisor availability

Think a robo‑advisor is right for you?

Learn more about what Schwab has to offer:

Schwab Intelligent Portfolios®
Our robo‑advisor builds, monitors, and automatically rebalances a diversified portfolio based on your goals. You can get help from Schwab professionals any time, 24/7.

Learn more

Schwab Intelligent Portfolios Premium® provides all the features of Schwab Intelligent Portfolios, plus unlimited 1:1 guidance from a Certified Financial Planner professional, digital financial plan and interactive online planning tools.

Learn more