Robo-advisors offer a modern twist on financial advising by utilizing automation and software algorithms to help you invest your money in line with your financial goals. Compared to traditional financial advisors, robo-advisors often come out on top in several key areas.

Robo-advisors have minimal ongoing costs after the algorithm creation process, making their fees significantly lower than those of personal financial advisors who often charge a hefty salary. Some robo-advisors, like Schwab's Intelligent Portfolios, even offer fees as low as 0%. Additionally, robo-advisors typically have low or no account minimums, making investing accessible to a wider range of individuals.

Rebalancing your investment portfolio to maintain a desired mix of assets is crucial for reducing volatility. While you can rebalance your portfolio on your own or hire someone to do it, a robo-advisor can automatically rebalance your portfolio as needed, ensuring that your asset allocation stays on track.

Robo-advisors aim to match market returns rather than beat them, which can be more reliable than actively managed funds that often fall short. Research shows that most actively managed funds fail to outperform the market consistently, making market-matching returns a solid strategy for investment growth.

Although robo-advisors excel in many areas of money management, there are some tasks that human advisors are better suited to handle, especially for individuals with complex financial needs. Robo-advisors may fall short in creating comprehensive financial plans and providing personalized investment choices.

While robo-advisors continue to gain popularity, it's essential to recognize their strengths and limitations when considering them as a financial management tool. Understanding how robo-advisors work, their potential for returns, and their role in your overall financial strategy can help you make informed decisions about utilizing these innovative financial tools.