Online Broker Vs Robo Advisor Differences and Similarities

While contemplating Online Broker vs Robo Advisor, it is essential to study the investing patterns and types of online trading that can take place. A key difference between the two is the level of human intervention that assists the users in making investment decisions.

Online trading with us at CAPEX gives you the control to trade financial assets on your own. However, Robo Advisor is a sophisticated mathematical algorithm that promotes maximum returns with minimal human intervention.

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Roy Connor
Author:
Roy Connor
Last Updated on:
27/03/2023
Topic:
Trading
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CAPEX - A trading platform for all

Even though the online trading platform has been gaining significant traction over the years, traders found it difficult to enter the market. We started our journey in 2016, intending to make online trading more accessible and easy for everyone. We at CAPEX have always been an education-oriented platform that is fitting for use for novices and experts alike.

As a reward for our efforts, in 2018, we were awarded the fastest-growing provider recognition. Despite starting much later compared to other platforms, within a short time, we at CAPEX stand among the conquerors of the Bitcoin trading industry and have been continuously succeeding, being ranked as one of the best online brokers worldwide as well.

Find high safety and security at CAPEX

We, at CAPEX, feature universally renowned, high-end technology and security systems for deposits and withdrawals. We, at CAPEX, are keen advocates of transparency and trust and continuously strive to provide the best possible services and safety features available in the market.

We are also one of the first brokers to receive the title of a fully licensed and controlled brand by the ADGM Financial Services Regulatory Authority  (FSRA) back in 2020, as well as being regulated by the Cyprus Securities and Exchange Commission (CySEC), the Seychelles Financial Services Authority (FSA) and the Financial Sector Conduct Authority (FSCA). As a result, we can proudly say that we are one of the most trusted and customer-friendly platforms that offer a one-of-a-kind trading experience.

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Things to Consider Before Using a Robo Advisor or an Online Brokerage

Active Investing

Active Investing is a hands-on method of managing a portfolio. The goal of active management of funds is to overpower the average returns from the stock market and to extract most of the short-term market fluctuations in the price. We, at CAPEX, provide detailed analysis and expertise to the customers to understand and perceive the right time to completely invest in or out of a stock or any other asset. The similarities between Robo Advisor and Online Trading is the prompt suggestions and notifications that both provide to aid in decision making for the user. In active investments, the portfolio manager is well-versed with the portfolio structure and is aware of the right time to purchase or sell an asset. The portfolio managers supervise the analysts that study the qualitative and quantitative constitutes of the market and determine when the prices would change and to what degree. Active investing guarantees flexibility in purchasing and selling stocks.

Passive Investing

Passive Investing is the right approach if you wish to invest in long-term investment packages. The passive investments come with regulated and limited options for buying and selling within the portfolio setting. Through CAPEX, we extend educational and practical offers that teach the customer the buy-and-hold mentality. It means that once the customer has purchased or invested in a stock, they must not react to every move of the stock market. A successful passive investment strategy is to hold a tiny piece of thousands of stocks and earn returns proportional to the overall upward trajectory of the products through the stock market. It is wise to ignore the short-term fallbacks and downturns and stay invested in the long-term growth of your investment. It is beneficial as it has a low fee while transparency and tax efficiency are maintained.

Which One to Choose?

Once both approaches to investing are studied, we can conclude that both are two sides of the same coin. We, at CAPEX, offer both methods to our customers and suggest the right approach based on your capacity to invest and your goals. Passive investing is a significantly beneficial approach due to its lesser risk-taking and inexpensive cons. The similarities between the two trading choices are promoting both the investment approaches on our platform. Irrespective of your choice, we provide guided services to acquire maximum returns. Most investors research Online Broker vs Robo Advisor and then use a passive investment approach due to its long term benefits and steady returns. Studies have shown that the two methods can coexist, and you can use them in different situations. Hence, we can say that the similarities and differences between the trading techniques can coexist to suit the users’ needs.

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Risk Tolerance

The important question that needs to be analysed under the Online Broker vs Robo Advisor debate is the degree of risk management services and safeguards each provides to the risk-taking users. Risk tolerance is the capacity of loss the investor can manage for the investment decisions made. We at CAPEX believe in the importance of gauging the risk tolerance level of the investor. Our experts can suggest whether investments are to be made conservatively with less high-risk investments.

There are three categories in which we, at CAPEX, divide the investors based on risk tolerance: aggressive, moderate and conservative. This segregation helps in chalking the individual goals to accumulate the most returns. One of the similarities with the Robo Advisor is that the software is created with an inbuilt account division based on the risk tolerance factor. Therefore, ascertaining risk tolerance is the right way to make informed investment decisions.

Online Broker

Before the internet became a marketable platform, the investors would either place stocks over the phone or permit a stockbroker to engage and order trades on their behalf. In the competitive digital age, Online Broker vs Robo Advisor is an ongoing debate. Therefore, it is imperative to draw a detailed analysis of the similarities and differences between the online trading platform and the technologically advanced software for making the right choice. An online broker is a trading service provider that allows clients to create, open, and close accounts on a digital platform. In addition, online trading with us at CAPEX has enabled individual traders to manage multiple investments easily. This allows them to dedicate much more time to widen their knowledge base and try out different trading tactics.

Advantages

Online brokerage is usually considered easier, more convenient, and usually more affordable. Utilising online brokerages gives you complete freedom to choose your financial instruments according to your needs, goals, and economic situations. Not only does this freedom come at a lower cost than Robo Advisors, but it is also a cheaper option than the conventional offline brokers.

Once you create your online trading account on CAPEX, trading services like placing an order, checking quotes and making modifications are convenient. Online trading with us at CAPEX has accelerated the execution of trades in the most beneficial circumstances and cost-effective methods. The expensive commission that you pay to your stockbroker is retained when you invest online through CAPEX. Online trading experience is one of convenience and effortless investing at the click of a button.

Disadvantages

Online trading is a convenient method that supports ease of life. But with this effortless investing, one is at the risk of making investment mistakes or overinvesting. Since this is an active form of investing, it involves much more monitoring and research on your part with regard to your investments. You make your own trading decisions, choose your stocks yourself, and buy and sell them when you think fit. A lot of people do not have that kind of time or knowledge. Unfortunately, online traders do not have physical and communicable relationships on online brokering that would help them to navigate muddy and uncertain waters in the ever-changing market.

Understanding this, we at CAPEX advise our clients to look through the packages, study and research on their own before investing. It provides them with a detailed understanding of stocks they wish to purchase and sets up security checks and balances in the readily growing market.

 

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Trading with CAPEX.com

The great thing about CFD trading online is that you can do it anywhere there is a secure internet connection. Inevitably, this means that mobile trading has proven particularly popular as traders can conveniently open and close positions from their mobile or tablet as and when it suits them.
Discover the functionality to ...
Trade more than 2,100 CFDs
Trade more than 2,100 CFDs
Manage your investment horizon
Manage your investment horizon
Set take-profit or stop-loss limits
Set take-profit or stop-loss limits
Open short and long positions
Open short and long positions
No fees for opening and closing positions
No fees for opening and closing positions
Trade with and without leverage (StoX)
Trade with and without leverage (StoX)
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Robo Advisor

A Robo Advisor is an automotive administrative service provider that offers you guidance and aids you in purchasing assets. Robo Advisors employ numerical algorithms to furnish trading guidance, and there is negligible human mediation. Instead, the algorithms oversee and designate the users’ resources most productively. Also, through customer-centred services, the algorithms find the correct advice to provide the investors.

Robo Advisors require minimal human intervention for all the activities, from the enlistment of the investors to the execution of the stock trades. Robo Advisors utilise Artificial Intelligence, but they employ the rules-based and logical conditionals. Moreover, they rely on certain fundamental principles, one of which is diversification of the investments. Upon pondering over Online Broker vs Robo Advisor, the speed of the latter is certainly praiseworthy.

Advantages

Robo Advisors can be super effective and helpful for investors, irrespective of the capacity to invest. The 24/7 accessibility of the automated advisor provides you with the convenience to purchase or sell the assets at the desired time. The portfolios allocated under the Robo Advisor can get out of balance at times, which is normal and expected. This allocation gets distorted due to the modifications after the investors experience asset categorisation. Therefore, such portfolios need to be rebalanced and regulated. The rebalancing takes place once a year mostly, with some providers offering it frequently, too. The markets may fluctuate at a varied rate, which requires periodic checks. Robo Advisors also serve as an advantage for the young investors that put in a small amount. For the same, Robo Advisors have incorporated the zero minimum balance technology.

Disadvantages

Robo Advisor operates on the basic principle of logical conditions, solely designed to meet the investment portfolio. But we humans are about more than just portfolios with diverse and dynamic goals, both short and long term. While the Robo Advisor allows modification in the investment goals of the financial planner, the practical money-related concerns can only be met and resolved through human interaction and emotional perspectives. Robo Advisors do not offer emotional support during market pitfalls or personal investing mistakes. Instead, human trading brokers help you access and tackle your fears and explain the functioning of the market. If you prefer physical interaction with a human interface to make trade decisions, then with us, at CAPEX.com, could be the right place to be.

 

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Difference Between Robo Advisors And Online Brokerages

Investing with Robo Advisor

Robo Advisors are getting increasingly popular for the management of a lot of investors’ wealth. In the competitive digital age, the Robo Advisor adds convenience for the users by allowing them to invest in diverse asset categories through smartphone applications. With the availability of such technologically advanced and accessible solutions as a Robo Advisor, the trading options have increased.

The Robo Advisor ensures that the portfolio formulated based on the client data is accurate and is monitored to notify with instant alerts for fraudulent activities. The service of the software has top-quality security checks which are not easy to surpass. It can detect irregular account activity and activate alert mode on the application. The software’s algorithms select the optimum investment portfolios that align with the goals and financial capacity of the investor. Hence, Robo Advisor is fast growing as a low-cost alternative to the traditional methods of investing.

Investing with Online Brokerage

Online Brokerage is the appropriate approach for all investors who wish to be involved in trading decisions. Online Brokerage offers the most lucrative packages and portfolios and also has reduced transaction fees. Our online trading platform, CAPEX, provides control and flexibility of sale and purchase to everyone who trades with us. You can access your accounts and execute a trade deal without the hassle of appointments or physical meetings. The online brokerage approach is valuable to avoid the biases that hinder the physical brokers. We ensure that we at CAPEX give you the complete worth of your money and also help in making informed and well-researched decisions.

Conclusion – Trade CFDs at CAPEX

While investing, you must determine your approach only after considerable research and understanding of the market. Nowadays, young users are inclined more towards the Robo Advisor because it operates on the logic condition and prepares the portfolios for the investors while keeping in mind the competitive digital age. However, even though the speed and efficiency of Robo Advisor is par excellence, to settle the Online Broker vs Robo Advisor debate, the biggest difference between the two trading tools is the level of human intervention, which makes online brokerage, like us at CAPEX, a better choice for investment method in the current system for most people. So, join us now and experience one of the best CFD trading platforms on the internet.

Online Brokerage vs Robo Advisor – FAQ

Which is better, Online Brokerage or Robo Advisor?
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HIGH RISK INVESTMENT WARNING: CAPEX.com is a website operated by Key Way Investments Limited, which is authorised and regulated by the Cyprus Securities and Exchange Commission, licence number 292/16. Administrative Address: 18 Spyrou Kyprianou Avenue, Suite 101, Nicosia 1075, Cyprus.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68.60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the risk of losing your money. Trading through an online platform carries additional risks. Refer to our Regulation section here.

Restricted Jurisdictions: We do not establish accounts to residents of certain jurisdictions including Japan, Canada and the USA. For further details please see Terms & Conditions.

Key Way Group Ltd is the holding company of Key Way Investments Ltd, JME Financial Services (Pty) Ltd and Key Way Markets Ltd. Key Way Investments Ltd operates CAPEX.com and is authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC) (license no. 292/16) with branches in Romania and Spain, and registered with the Romanian Financial Supervisory Authority (ASF) (registration no. PJM01SFIM/400013), and with the Spanish National Securities Market Commission (CNMV) (registration no. 129), respectively. JME Financial Services (Pty) Ltd operates za.capex.com and is authorized and regulated by the South African Financial Sector Conduct Authority (FSCA) (license no.37166). Key Way Markets Ltd operates ae.capex.com and is authorized and regulated by the Abu Dhabi Global Market (ADGM) Financial Services Regulatory Authority (license no. 190005). KW Investments Ltd operates sc.capex.com and is authorized and regulated by the Seychelles Financial Services Authority (FSA) (SD020).