A robo-advisor can be a great way to invest your money and put it to work for you. When choosing the right one for your situation, you will likely start comparing returns on your investment. However, just because it has had positive returns in the past does not mean it will do the same every time. That's why it’s a good idea to consider other factors as well.

It Isn’t a Substitute for Wise Financial Choices

Robo-advisors rely on technology to make investment decisions for you, but that does not mean you can turn over all your financial decisions to a robot. You still need to be making wise financial decisions for yourself. You will need to make sure you have enough money set aside for investing. One way of doing that is by cutting back on monthly expenses through a student loan refinance. Options like the NaviRefi student loan refinance can free up cash that can then be put to work for you.

Think About the Support Offered

Some advisors are completely hands-off, so there may not be any human advisors involved. On the other hand, you may have access to planning tools, even if no human is involved. Some companies do enlist the help of professionals in case you have questions. Consider whether you will need a human to address any concerns and do your research on the type of support offered by each option. If you are interested in something specific like socially responsible investing, it might help to talk to a person before jumping straight in.

Consider Each Potential Investment

A robo-advisor will make the investment decisions for you, but it’s still important to consider the available options. You will want to have a strong understanding of the process and where your money is going. You might answer some questions while you are getting set up so you can understand where the funds are going and so the advisor can make the right decisions. The portfolio should be tailored to your financial situation.

If you are younger, you may not want as much sitting in cash, as this does not allow you to take full advantage of the market. On the other hand, those closer to retirement may not want as much money tied up in long-term investments, as they may need the funds sooner. While your portfolio may never be perfect, don’t let that stop you from getting started. Time is on your side when you are younger, as this gives the funds a chance to mature and grow. Investing is often better than keeping your money in a cash account, since you can get better returns.

Consider Fees and Account Minimums

Compare the fees across the options you are considering. Factor in everything from investment to management fees, even if they seem small. The seemingly small ones can impact your long-term gains or losses. You should also check to see if there are any account minimums that you need to maintain. Some may require several thousand dollars before getting started, while others may only require a few hundred. Some may not have any minimums at all, so make sure you do your research.