In the past, mutual fund managers basically pulled together funds and charged a hefty 2-3% management fee for trying to beat the market. The fees usually eat into returns in the long run and thus the ones who benefited ultimately were the fund managers. Robo-Advisors aim to change that.
Long answer: Low-cost Diversified Passive Investing Low Cost: Usually 0.5% to 1% fees are charged for total amount managed (because they are run by models and algorithms behind instead of fund managers, hence the word ‘Robo’) Diversified: Usually put into a basket of Global Exchange Traded Funds (ETFs) which exposes the fund to the global economy in different sectors in some form of a mix of equities and bonds. Some of these ETFs are not available to retail investors. Passive Investing: A longer-term approach to growing wealth rather than high-frequency trading...Short answer: An easier way to invest with lower fees!