Please stay tuned for important disclosure information at the conclusion of this episode.

Some investors are choosing to go digital for financial advice.

Robo advisors charge lower fees than traditional financial advisors.

They tend to be more accessible to investors with smaller account balances.

The digital investing platforms come with advantages and disadvantages. Morningstar has evaluated

18 leading robo advisors and ranked the best of 2023. Morningstar Research Services, portfolio

strategies Amy Arnott, and senior manager research analyst Gabe Dennis,

are joining investing insights to discuss what the team has found.

Amy, let's start off with an explainer. What's a robo advisor?

So a robo advisor is a type of investment management where you go to a website and the website uses a portfolio

advice engine or a series of algorithms to manage your money for you. So typically they will

start out by asking you a series of questions about your goals, your time horizon, your risk

tolerance, and then they match you up with a portfolio,

typically one of at least five different risk options ranging from conservative to aggressive.

And they will automatically rebalance that portfolio for you to keep the allocations in line with the target levels over time.

So Gabe, what kind of investor would benefit from using a robo advisor?

So there's a few different profiles of investors that would benefit from a robo advisor.

One of the most common kind of use cases that we can see is sort of that investor that's

kind of taking the bridge between going fully self sort of that investor that's kind of taking

the bridge between going fully self-directed on a cheap brokerage platform online. Think of your

Robin Hood on your phone or something else on a computer. And then those that are actually going

to a traditional wealth manager that's going to have really comprehensive estate planning advice

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