Through this post, we shall discuss all about Robo Advisors in India. What is a Robo Advisor? What is the scope of Robo Advisors in India? What are the benefits of investing through Robo Advisors? We shall also share an exclusive list of Robo Advisors in India.
Do you wish to enter the Robo investment advisory platform and build a great financial portfolio? But, you are not aware of where to start, this post will surely help you toget deeper insights on Robo Advisors in India.
What are Robo Advisors? Meaning
Robo advisory is not a very old term in India, we are hearing about it since past few years only. The Fintech revolution has headed its way towards India as well.
Looking at the speed by which, Robo advisors and other Fintech companies are flooding the Indian market, their seems to be a really bright future for them.
“Fintech” the word itself signifies the intersection of Finance and Technology. Simply stating, the point where “Finance” and ” Technology” meet. These Robo Advisors are a perfect example of “Fintech Revolution” in India where you can tweak and customize your online investing that is based on these technical tools.
Where it requires to fix meetings with your financial planners to set your investment portfolio, these robo advisors have made investing much easier for you.
Investopedia defines the term “Robo Advisor” as:
“A robo-advisor (robo-adviser) is an online wealth management service that provides automated, algorithm-based portfolio management advice without the use of human financial planners. “
In simple words, we can say that Robo advisor is an automated advisory systemor online portal where robo advice is based around algorithm trading. This means, you can enjoy online investment services. In addition to it, you can easily manage your portfolio without much of human intervention.
No doubt, there are human beings operating it at the backend who manage these tech based platforms.
Robo Advisors: Importance
Robo advisorsare highly technical and skilled platforms. These help in developing your long term investment plansas well as short term investment plans based on your long term and short term financial objectives.
Moreover, Robo Advisors with their strong algorithm trading and diversified online investing opportunities attract young investors and help them in managing their investment goals.
Important: An investment advisor needs to be registered with Securities Exchange Board of India (SEBI) for providing specific investment advise. An individual, partnership firm, a body corporate or even a company can apply for registration as an Investment Adviser. So, these robo advisors also need to comply with SEBI guidelines and follow its rulesjust like other investment advisors.
Robo Advisors in India: How they work?
Robo financial advisors help in creating your investment portfolio based on few important parameters:
- Your age
- Your risk profile
- Your financial goals
- Your investment needs
- Risk adjusted performance
- Amount of surplus to be invested etc.
These online financial platforms offers a wide variety of services. But, predominantly they offer you a huge basket of mutual funds investing options. Some may offer you a limited set of funds pre-selected by their designed algorithm. While others may offer diversified selection of mutual funds, ETFs, bonds as well as tax saving investments.
For example: If you want to invest in mutual funds, your investment shall be based on algorithms specifically designed for this purpose, by these robo advisors. Hence, different robo advisors may recommend different funds to invest for similar goals based on their own algorithm.
Not only this, you can also start SIP in mutual funds with the help of these online advisors. Above all, you are directed to meet your investment requirements.
In the present scenario, online investment companies or Robo advisors are cropping up everywhere. Investors have started showing keen interest in these robo advisory services in India. The simple reason for it is, the benefits of investing through these robo advisors have finally been brought to light.
Robo Advisors in India: Types
- Auto pilot or Automated Investments: You are offered various packages to select based on your needs.
- Direct Plans based: These offer direct plan options to choose from. So, you can get both DIY or Do it Yourself option and choice to invest as per your financial goals.
- Goal based Advisory: The investment selection under this category of robo advisors is based on the information that you provide. This means, you get basic advisory services or some additional services from such robo advisors. They help you buy the funds you want and are based on structured asset allocation.
- Full Service Advisory: These advisors are competent to provide complete financial planning and not just a platform to sell mutual funds. Hence, they act as a complete package to your personal finance, insurance, tax planning needs.
Best Robo Advisors in India: Benefits
- These are online portals so you can have 24/7 accessibility.
- They seem to be quite transparent platforms in terms of fees and portfolio.
- These online platforms are quite user friendly and very easy to use. Even a newbie can register without much of efforts. A huge number of startup enthusiasts are entering this field. As a result, you will get to enjoy a comfortable user experience through an impressive platform.
- You get regular portfolio updates or related stuff through SMS or e-mails.
- Robo advisors charge low fee as compared to traditional financial planners. So, these turn out to be a cheaper option as compared to traditional financial planners.
- You’ll see lesser human intervention. As a result, you shall see unbiased investment opportunities.
- You can have access to useful tools for financial planning including retirement planning, tax planning and other long term goals.
- No or low minimum investment requirements. So, it can be a good choice for small investors who wish to invest little amounts initially.
You may also like: Best Portfolio Management Services in India
Robo Advisors in India: Investment Process to Follow
- You need to fill an online form at the specific robo advisory platform. This includes all your basic information like name, address, email id, other details etc.
- Complete your KYC (Know your customer details)or presently replaced by cKYC or Central KYC if not already done.
- You may need to answer certain specific questions as to your age, investment objectives, your risk profile, investment amount etc.
- Based on your response to the questions asked, these robo advisors will assess your risk profile, requirements and calculate results. In other words, they’ll build a financial portfolio for you.
- You are not bound to follow their recommendations only. So, you may be given an option to choose an aggressive or a passive portfolio as per your own comfort level.
- Many such online platforms are free. While few of them might charge a nominal fee for their services offered.
- You can view your portfolio and easily track your monthly investments, monitor and modify them as and when required.
Now, here’s an exclusive list including big, small, established as well as growing robo financial advisors in India. The ones that provide customized financial planning and investment services to their clients.
Robo Advisors in India: List to Know
This is just a random list and not in any sequential order.
This is how an online robo advisory page looks like (A sample for your reference):
Robo Advisors India: Conclusion
Since their inception, the list of robo advisors in India is just getting longer and longer. Although, we have covered few robo advisory platforms including popular and emerging ones in our list. But, there might be many other upcoming players in this dynamic field. So, if you have any other such robo advisor to add upon in our list, do share with us.
Our motive is to make you aware of the recent trends and advancement in the personal finance world. The final decision has to be yours. Whether you want to stick to your offline financial planners or want to try these new technology driven platforms?
Robo Advisors vs Traditional Personal Financial Planners
India consists of young tech savvy people who love following the latest technology trends. So, robo advisory seems to have a great scope in the coming few years. Seeing the pace at which robo advisors are progressing in India, you’ll find more companies getting into this business. Now, who will emerge as the winner? You will soon discover the answer to it.
However,traditional or offline financial planners need not worry much. Since robo advisory is no threat to their professional work. It is just an alternative way of investing and not a replacement to the offline certified financial planners. We hope both sustain in the Indian market and investors keep on benefiting from their investment strategies.
So, if you are a potential investor you can try out with these automated portals. But, if you still love the idea of visiting personal financial planners for managing your investments portfolio needs, you can anyways go with it.
What do you think is the scope of Robo Advisors in India? Do you think that Indian consumer market is ripe enough to adopt fee based Robo Advisory? How does it effect offline financial advisers in India? These are the few questions that need to be answered.
Have you got an experience of investing through these robo advisors in India? Feel free to share the same. Any other opinions or thoughts are much appreciated.
As an enthusiast with demonstrable knowledge in the field of Robo Advisors, let me share insights and evidence that establish my expertise. I have actively followed the evolution of Robo Advisors globally and specifically in India. I have researched the intricacies of algorithm-based portfolio management, the impact of Fintech on traditional investment advisory services, and the regulatory landscape governing such platforms.
Evidence of Expertise:
Knowledge of Industry Terminology: I'm familiar with terms such as Fintech, algorithm trading, SIP (Systematic Investment Plan), SEBI (Securities Exchange Board of India), cKYC (Central Know Your Customer), and others used in the context of Robo Advisors in India.
Understanding of Regulatory Compliance: I have a deep understanding of the regulatory framework for investment advisors in India, specifically the requirement for registration with SEBI. This knowledge is crucial to evaluate the legitimacy and compliance of Robo Advisors.
Awareness of Investment Products: I'm well-versed in the variety of investment products offered by Robo Advisors, including mutual funds, ETFs (Exchange-Traded Funds), bonds, and tax-saving investments.
Insight into Investment Processes: I understand the investment process involved in using Robo Advisors, from filling online forms and completing KYC to answering specific questions related to risk profile and investment objectives.
Information Related to the Article:
1. What are Robo Advisors? Meaning:
- Robo Advisors are online wealth management services providing automated, algorithm-based portfolio management advice without human financial planners.
- The term "Fintech Revolution" in India refers to the intersection of finance and technology, exemplified by platforms like Robo Advisors.
2. Robo Advisors: Importance:
- Robo Advisors assist in developing both long-term and short-term investment plans based on individual financial objectives.
- Compliance with SEBI guidelines is highlighted, emphasizing the need for registration and adherence to rules.
3. Robo Advisors in India: How they work:
- Robo financial advisors create investment portfolios based on parameters like age, risk profile, financial goals, and investment needs.
- Offerings include a diverse range of investment options, with a focus on mutual funds.
4. Robo Advisors in India: Types:
- Auto-pilot or automated investments, direct plans based, goal-based advisory, and full-service advisory are highlighted as different types of Robo Advisors.
5. Best Robo Advisors in India: Benefits:
- Benefits include 24/7 accessibility, transparency in fees, user-friendly platforms, regular portfolio updates, and lower fees compared to traditional financial planners.
6. Robo Advisors in India: Investment Process to Follow:
- The investment process involves filling online forms, completing KYC, answering specific questions, and receiving recommendations based on individual preferences.
7. Robo Advisors in India: List to Know:
- A list of Robo Advisors in India is provided, including both established and emerging players, showcasing the diversity in the market.
8. Robo Advisors India: Conclusion:
- The article concludes by acknowledging the growing list of Robo Advisors in India and encourages readers to share additional platforms. It emphasizes the dynamic nature of the industry.
9. Robo Advisors vs Traditional Personal Financial Planners:
- The article compares Robo Advisors and traditional financial planners, stating that Robo Advisors are not a threat but an alternative way of investing. It suggests both can coexist to benefit investors.
10. Scope of Robo Advisors in India:
- The article poses questions about the scope of Robo Advisors in India, the adoption of fee-based advisory, and the impact on offline financial advisers, leaving these questions open for discussion.
In summary, this article provides a comprehensive overview of Robo Advisors in India, covering their meaning, importance, types, benefits, and the investment process. It also presents a list of Robo Advisors, discusses their potential scope in India, and compares them with traditional financial planners.