A robo-advisor is an automated investment service that builds and manages a portfolio for you from an online questionnaire, usually for less than a traditional advisor charges.
The SEC describes robo-advisers as automated digital advisory programs that ask about your goals, time horizon, income and risk tolerance, then create and manage a portfolio. They often cost less and have lower minimums than traditional advisers, and their services vary widely.
A robo-advisor manages a portfolio. It won't tell you when to claim Social Security, how to handle a stock grant or what to do with an inheritance. Hybrid services add access to human advisors for a higher fee. For comparison, fee-only firms that publish an asset-based rate charge a median 1% a year on the first tier, and many also offer flat-fee planning that works alongside a low-cost portfolio.
A robo-advisor that manages your money for a fee is an investment adviser, so its Form ADV is public like any other firm's.
How to check
Search the service on the SEC's Investment Adviser Public Disclosure site and read its Form ADV Part 2A brochure for the fee, what is automated, and when a person is involved.
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