Investment Guides

Advantages and Disadvantages of Robo-Advisors

Adv vs Dis Robo
Lily Bridgwood
Written by Lily Bridgwood

Robo-advisory is the concept of using automation and digital techniques, such as algorithms, to manage and build portfolios for investors with minimal human intervention.

Like any form of investment, the value of your money can decrease as well as increase when you invest with robo-advisors. To help you decide whether this form of investment is for you, we’ve listed the advantages and disadvantages of robo-advisors below:


  1.  Low Fees
    For many investors traditional financial advisory fees have become unaffordable. The higher levels of automation that robo-advisors can provide means that they can offer lower fees than traditional wealth managers or financial advisers.
  2. Low Minimum Investment
    Robo-advisors tend to have lower minimum investments than traditional wealth managers. For example, OFF3R partners Moneyfarm have a minimum investment of just £1. These lower minimums are due to the lower overheads of robo-advisors and the cost-savings that can be made via ETF trading.
  3. Simplicity
    Many people want to start to invest in the markets but don’t want the hassle or time commitment it takes to build their own investment portfolio. Robo-advisors offer a good option for these investors as the platform allow you to sit back whilst they invest your money in a diversified portfolio. But investors need to be fully aware that their investment can fall in value as well as rise.
  4. Exchange Traded Funds
    ETFs are fully transparent of the assets that make up the fund, they entail low management fees and they trade daily, therefore whenever the stock exchange is open, robo-advisors can adapt the portfolio in line with any fluctuations.


  1.  Lack of Personalisation
    Whilst technology has made significant advancements, there is still a long way to go before robo-advisors are able to deliver the same level of personalisation as a traditional IFA, wealth manager or a do it yourself investor.


  1. DIY Investment
    For the younger generation, brought up surrounded by the use of technology, this is a natural progression. They can quickly and relatively cheaply invest for the first time via a technology enabled solution. But for those older investors that are used to the traditional finance marketplace, and the reassurance of human interaction when making financial decisions, this may hold back some investors from signing up with a robo-advisor.

Compare Robo-Advisors

Below are the Robo-Advisors available on OFF3R:

The Nutmeg General Investment Account allows you to choose the risk level that's right for you. Nutmeg then builds the portfolio on your behalf, showing you the results in an intelligent, straightforward manner.Go to Site
The Moneyfarm General Investment Account is a low-cost, flexible investment account, tailor-made, managed by a team of experts. Go to Site
Wealthsimple is a digital investment manager on a mission to make smart investing accessible, simple and affordable for everyone.Go to Site
IG Smart Portfolios are low-cost, expertly managed and globally diversified investment portfolios, which you can open and monitor fully online. As with all investment products, your capital is at risk.Go to Site
The Hargreaves Lansdown Portfolio+ offers simplicity, performance potential and a low minimum investment of £1,000. While the portfolios can be sold at any time, free of charge, they should only be bought as long-term investments.Go to Site
The True Potential Investor General Investment Account allows you to invest any amount and withdraw your money at any time, without annual or lifetime limits.Go to Site
The Munnypot General Investment Account is provided in combination with automated online investment advice to monitor an investor’s money with the aim of achieving their goals.Go to Site

Please head over to OFF3R for a more detailed comparison of the Stocks and Shares ISAs and General Investment Accounts available with our robo-advisor partners.

Risk Warning

Your capital is at risk with investments of this nature. The value of your investment can go down as well as up and you may get back less than you invest.

Robo Advisors

About the author

Lily Bridgwood

Lily Bridgwood

Lily is the Partnerships Associate at OFF3R. She has previous work experience in both the corporate and start-up environments. She joined the OFF3R team in October having recently graduated with First-Class Honours in International Business from the University of Edinburgh.