UAE: Robot financial advisors on rise: Is it worth the cost? How does it fare against traditional alternatives?

UAE: Robot financial advisors on rise: Is it worth the cost? How does it fare against traditional alternatives?

Dubai: As an investor, you have always had two options when it comes to managing your investments. You could do it yourself through something like an online broker or you can work with a financial advisor. With the entry of robo-advisors, online investment services that offer financial advice driven by algorithms, there's a third option, and that's to merge the benefits of professional money management and advice with the convenience of an all-digital application. Since launching more than a decade ago, robo-advisors have grown into an industry that managed $460 billion (Dh1. 7 trillion) in 2020 – a 30 per cent increase from 2019. Some analysts predict robo-advising will become a $1. 2 trillion (Dh4. 41 trillion) industry by 2024. Robo-advisors are investment management companies that rely on computers — rather than human financial advisors — to build and manage your portfolio. They are essentially a class of financial adviser that provide financial advice or investment management online with moderate to minimal human intervention. They provide digital financial advice based on mathematical rules or algorithms. In other words. robo-advisors are automated portfolio managers and can often be thought as an autopilot for investors. Robo-advisors manage your assets based on your