What is robo advice?

  • Robo advice can be personal or general.
  • It can help clarify if financial advice is for you, without too much commitment.
  • Robo advice is only as good as the quality of information you provide.

Robo advice, also referred to as digital advice, is financial advice delivered online or through an app on a tablet or smartphone, without the need to see a financial adviser face-to-face. It can be convenient and cost-effective.

what is robo advice

How robo advice works

Robo advice uses an algorithm based on machine learning or artificial intelligence and requires you to provide information such as your age, gender, financial goals, risk tolerance, income and assets on a digital advice website. Assumptions are made using this information, which will generate financial advice the program determines is most suited to you.

Robo advice usually focuses on a single (advice) issue only, such as recommending suitable investment options. After answering the questions and providing the required information about your financial and personal circumstances, the algorithm takes all this into account before making recommendations and producing a statement of advice (SOA) where personal advice is given and financial products are recommended.

Robo advisers can also be used to obtain general advice, though this will not be tailored to your specific needs, as you will not be asked to provide detailed information about your personal and financial situation. This advice will not lead to the generation of an SOA and you will need to consider whether it is appropriate for you before actioning the general advice.


Your circumstances can change over time, so it's a good idea to check at least every 12 months or more frequently if need be, that the advice still fits your needs.

Types of users

Robo advice generally attracts lower fees, as human advisers don't assess your situation and needs. It may appeal to those who:

  • have smaller amounts to investment (e.g. younger people)
  • cannot afford personal financial advice
  • are time-poor
  • are curious about or want to "test the financial advice waters"
  • are constrained by geographic distance
  • need advice for simple strategies.

Robo advice in practice

Superannuation funds might use digital platforms providing automated services regarding optimal superannuation contributions or suitable investment options. However, this advice will usually require you to make recommended changes online or by calling your fund.

Note: Robo advice firms that offer advice on financial products still need to have an AFS licensee or be an authorised representative of an AFS licensee, as per a human financial adviser.

 General versus personal financial advice
 What is a financial adviser?