What is a robo-advisor?

A robo-advisor is an automated platform that provides investment management services. This type of service uses algorithms and technology to create and manage investment portfolios for clients, typically with relatively low fees compared to traditional investment advisors. Robo-advisors gather information from clients regarding their financial goals and risk tolerance, typically through an online questionnaire. Based on this information, they allocate investments into various asset classes such as stocks, bonds, and ETFs, automatically rebalancing the portfolio as needed.

The other options describe different services that are not addressed by a robo-advisor. An in-person investment advisory service involves human advisors providing personalized guidance, which contrasts with the automated nature of robo-advisors. A financial news aggregator collects and summarizes financial news, serving a different purpose than investment management. A mobile application for trading stocks allows users to buy and sell securities directly but does not encompass the comprehensive management and advisory functions provided by a robo-advisor. Overall, the key characteristic of a robo-advisor is its use of technology to automate investment management, making it accessible and affordable for a broader audience.