Pros and cons of using a robo-adviser

Robo adviser
Pros and cons

Investors have many options for financial advisory services these days and may choose to use a traditional human financial adviser or a digital robo-adviser. Understanding the pros and cons of robo-advisers can help you assess whether a robo-adviser is right for you.


Lower fees

One of the key advantages of robo-advisers typically seen is lower fee levels, e.g. an annual advisory fee of less than 1% of the client’s account value. By eliminating or minimising human participation and other expenses of a bricks-and mortar-business, robo-advisers should be able to offer financial advisory services at a much lower cost than traditional financial advisers.


Normally, you do not need to queue up at the bank or fix an appointment with a robo-adviser. Robo-advisers are often available 24/7 as long as you have an internet connection. You just need to log in to your account, submit the required information, and a recommended portfolio is generated automatically. You can usually track your investment with a robo-adviser anytime and anywhere.

Low minimum balances

In general, you can start your investment with a robo-adviser with a few thousand Hong Kong dollars or even less. Some robo-advisers may not have any minimum balance requirement at all.


Lack of personal touch

The lack of human interaction with the client is the major limitation of robo-advisers. Robo-advice relies on the information provided by the clients commonly through an online questionnaire. A robo-adviser would not be able to probe for more information nor can it sense you had more to say in regards to a question.

In comparison, a human adviser may be able to consider factors that are relevant to a client in a more qualitative and holistic way. A human adviser can prompt clients for more information and read emotional cues. When you are nervous about the market conditions and your investments, a human adviser would be able to explain how the investment markets work and address your concerns.

Tech savvy

The client needs to have a certain level of comfort with technology and a computer or mobile app since everything is done online. Those who are not familiar with the digital environment may find it daunting to deal with a robo-adviser.


4 April 2019