Learning how to operate a Robo-advisor

Once you have your Robo-advisor up and running with investors and funded accounts, there are a number of operational processes to take care of. Some of these require daily actions, while others are more infrequent. Many of these processes can once again be automated, but certain human oversight is necessary, due to potential complications and exceptions that may happen when dealing with human investors. We will explore these in the following sections. The following chart breaks down the key processes we will need to cover.

Figure 2.2 – The standard operations for a Robo-advisor

Dividends

A rather pesky feature of many investment products is that underneath a fund structure such as an ETF, there are actual company stocks. According to law, these companies must report and pay out any dividends decided by the board of directors quarterly. Therefore, if your portfolio contains the stocks of these companies,...