Will Robo Asset Allocation Increasingly Shape Your Retirement?
By Robert McGarvey
Robo financial advising – stock picking via machines – just took a big step into serious legitimacy with the debut of Betterment’s Tax-Coordinated Portfolio tool.
A key tactic of human financial advisors has been to use asset allocation of investments to increase a portfolio’s after-tax returns. It can make a big difference in terms of the money in your pocket. The calculation of robo-advisor Betterment is that asset allocation can lift after-tax returns by 0.48% per year which, said Betterment, can put an extra 15% in your pocket over 30 years. “Reducing taxes adds a ton of value to investors,” said Jon Stein, Betterment CEO.