What this book covers
Chapter 1, Introduction to Robo-Advisors, will help you understand what a Robo-advisor is, why it exists, and how it works. We will cover the history of Robo-advisors to educate you on how these platforms have become popular, and why they have become an essential part of wealth management today.
Chapter 2, What Makes Up a Robo-Advisor?, will serve as a broad introduction to the inner workings of a Robo-advisor, and how the different parts relate to each other. This will serve as a reference during Part 2, when we build out each of these components.
Chapter 3, Robo-Advisor Platforms versus Algorithms, will help different types of readers understand how the core algorithms underlying a Robo-advisor are necessary but not sufficient to build a commercial Robo-advisor platform.
Chapter 4, Leasing, Buying, or Building Your Own Robo-Advisor, will help you decide whether you should be building your own Robo-advisor or using commercially available platforms.
Chapter 5, Basic Setup and Requirements to Build a Robo-Advisor, will establish the tools, skills, and technologies needed to complete the hands-on part of the book.
Chapter 6, Goal-Based Investing, will introduce the key concept of goals, as it relates to investing. We will look at how we can model different types of goals as investments, to use later on in transacting.
Chapter 7, Risk Profiling and Scoring, will look at ways to quantify risk for investments and how to score the risk appetite for investors.
Chapter 8, Model Portfolio Construction, will teach you how to create portfolios from individual investment products such as exchange-traded funds (ETFs) , and how to use portfolios with risk scoring in your Robo-advisor.
Chapter 9, Investment Projections, will teach you how to calculate and visualize projections for investments using your model portfolios. We will show possible outcomes given certain investment time horizons and amounts.
Chapter 10, Account Opening and KYC, will teach you how to open accounts and perform Know Your Customer (KYC) verification with brokers for the purposes of transacting your portfolios.
Chapter 11, Funding Your Account, will teach you about different ways in which you can fund your investment account.
Chapter 12, Order Management and Execution, will teach you how to create, manage, and execute orders for your portfolios.
Chapter 13, Performance Reporting, will show you how Robo-advisors are not manual algorithms but are automated to ensure the portfolio is consistently in good standing. This chapter covers the additional requirements to run and operate a Robo-advisor continuously.
Chapter 14, Rebalancing, will teach you about one of the core capabilities of any Robo-advisor: rebalancing. This ensures the portfolio stays close to the original model portfolio, despite market fluctuations between asset classes.
Chapter 15, Dividends and Fee Management, will show you that, in addition to orders and rebalancing, we should take care to calculate dividends from the underlying products in our portfolio, and charge appropriate fees where necessary.
Chapter 16, Regulations for Robo-Advisors, will wrap it all up, and explore the regulatory requirements to operate various types of Robo-advisors.
