Denise Trowbridge

There's a new technology shaking up the financial services industry: Robo-advising.

Robo-advising, also known as robo-investing, uses computer algorithms to design personalized investment portfolios, as well as rebalance and manage those investments. It's supposed to make investing for retirement and other goals less expensive, easier and more accessible to middle- and working-class folks.

How it works. Once you sign on with a robo-advisor, you'll fill out a detailed questionnaire about your financial goals, risk tolerance and time horizon. That information is used to design a personalized investment portfolio.

Robo-advisors claim to save investors' money. How? Portfolios generally contain index funds and ETFs, or exchange-traded funds, which have lower fees than many other investments, and all rebalancing is done automatically, by computer. Most robo-advisors charge their own fee, starting at around .25 percent a year, for the service. It's more expensive than picking a few Vanguard funds on your own, but less costly than hiring a full-service human financial planner.

Is it for you? If your financial life is simple or you're already a do-it-yourself investor or you are new to investing, a robo-advisor might be a good fit. If you need help with the big picture - tax planning, estate planning, investment choices or are juggling many financial goals - you might want to track down a real human. Look for a fee-only certified financial planner. Certification means they have an ethical and professional fiduciary duty to choose investments that are well-suited to you.

If you need to address more basic financial issues, such as debt and budgeting, before tackling investments, the Ohio State University Extension has consumer financial educators offering classes and free advice in every county (go to for information). Or, check out for free tools and advice.

Another downside to robo-advisors is, if they go through a third-party site rather than use one at a large brokerage house such as Vanguard or Charles Schwab, you might have to transfer your financial assets to that company for management. This is fine if you love their fund offerings, but might limit your access to other investments, such as individual stocks. They also might not have more complicated account types such as self-employed IRAs. Before signing up, make sure you know what the company offers.

If the idea of robo-advice intrigues you, here are some of the major players in the field: LearnVest is a robo-advice company that generates personalized investment plans, but also has a staff of certified financial planners available by phone or email to answer your questions, which gives LearnVest a higher level of service than many robo-plan-only companies. They also have an app to help you track your goal progress. It'll cost you more. LearnVest charges a set-up fee of $299 plus $19 a month to maintain a plan. is so far the largest player in the third-party robo-investing world. Betterment offers personalized investment portfolios for a variety of goals, such as retirement, saving for a house or college, and general wealth building. (You have the option to design a separate investment portfolio for each goal.) Betterment portfolios exclusively contain ETFs. There is no minimum account balance, and service fees start at $3 a month. The more you invest, the lower the fees.

Some traditional brokerages offer robo-investing advice to clients who might otherwise be going it alone. If you already have an account there, check to see if they have a robo-investing program.

For example, Charles Schwab's Intelligent Portfolios robo-service offers personalized investment portfolios with no advisory fees or account service fees. The minimum investment is $5,000, and the portfolios consist of ETFs in a variety of asset classes, such as fixed-income, stock, commodities and FDIC-insured cash investments.

Vanguard, a company whose mutual funds are considered the gold-standard for low-fee investing, launched their answer to the robo-program - Personal Advisor Services - last May. Here, you're coupled with a team of human financial advisors, who design personalized portfolios of low-cost Vanguard mutual funds. The minimum investment is $50,000, plus an annual fee of 0.30 percent.

--Denise Trowbridge is a self-professed money geek who writes about personal finance, banking and insurance for The Columbus Dispatch, and