Investing your money is easier than ever in this digital age. Gone are the days of having to call or visit a financial professional in person. Now, most investing can be done online—there are even apps to help you. From apps to help you save your spare change to stock trading apps, there are options out there for multiple financial situations. But not all investing apps are equal, and depending on your goals it might still be a good idea to work with a person instead of an algorithm. 

Here’s what you should know about the pros and cons of investment apps. 

Pro: Great for Investment Beginners 

If you’re new to investing, using an app may be the right choice for you. Many apps make it simple to invest and choose how to split your assets. Some apps involve a hands-off approach where extra money from your bank account or change from your purchases is invested automatically without any extra effort from you. Others provide educational guidance on investing that can be helpful for beginners. Some apps even use algorithms to help you make investment decisions. 

Con: Minimal Personal Financial Advice 

A con to using investment apps is that you don’t have the benefit of working with a person who can provide personalized advice and guidance. For those who are just starting out, or have very little to invest, this might be okay. But if you’re looking to start investing large amounts of money, it might be better to talk to a financial professional who can help you sort out your goals and start working toward them. 

Pro: Low-Hanging Fruit  

Another pro of using investment apps is that many of them have low minimums and low or no fees. This makes it easy for those with lower incomes to still participate in investing, and can provide a smart way to save and grow your assets with minimal effort. Some apps allow you to invest as little as five dollars, while others focus on rounding your card purchases to invest spare change. 

Con: Fees Can Add Up 

Even if the fees for investment apps seem low, they can add up when you’re thinking about the returns you’re receiving, especially for small amounts of money. Flat monthly fees for apps can hurt you more than help you. For instance, if an app has a $1 monthly fee, that may seem pretty low. But compare that cost to an app or investment service that takes a percentage of your assets instead. Let’s say the asset-based fee is 1% per year. If you invest $100, your asset-based fee would be $1 for the year, but your flat fee would be $12 for the year (12% instead of 1%). 

Even if you’re not ready to start investing, talking with a financial professional can help you figure out what investment strategies work best for you—whether that means using an app or a person. 
 

^{*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2021 Advisor Websites.}