4 Reasons Why Millennials Are Crazy About Robo-Advisors

It’s about time people started using advanced technology to manage their investments

In the past few years, we’ve seen breakthrough innovations such as autonomous trucks, packages delivered by drones, and wireless phone charging. We’ve also finally started to see equivalent innovations and advancements in the financial industry.

Robo-advisors, or automated financial advisors, have grown significantly in the past two years. Bloomberg reports that robo-advisors’ (or RA’s) assets under management will grow from $50B in 2017 to $2T just in the U.S. by 2020. That’s more than Russia’s GDP!

A large driver of that asset growth under management has been millennials. The demographic loosely defined as those born in the 1980’s to mid-1990’s has seen technology shape nearly every aspect of their lives. In that sense, they’ve become the de facto early-adopter generation with new technologies.

While this interest in new technology may have driven many millennials to experiment with robo-advisors, their approach to finance has also been a perfect match with the features that robo-advisors provide.

Let’s break this down to understand the main reasons behind the breakthrough for robo-advisors and the growing interest in using them among millennial clients.

1. Low Fees

Traditional financial advisors typically charge 1.5% of your assets annually, and that can be higher in some cases. For a young investor growing their portfolio over a long period, this can end up being a very substantial expense year-over-year.

In addition, as millennial investors get started early with long-term investment planning, every dollar counts. Simply, they don’t have the money in their bank accounts to pay large fees. That’s one reason why Wells Fargo believes only 16 percent of millennials work with a financial advisor.

RA’s, on the other hand, can be much more efficient. They have passed a chunk of this cost saving to the end user. Fees are usually less than 1% and can go as low as 0.25% for larger accounts.

That’s 83% less. Who doesn’t like saving money? Millennials for one, love it! For less money they can receive more efficient portfolios, while tracking their investments in nearly real-time from their iPhones.

2. Low Minimum Investment

Advanced technology is allowing robo-advisors to offer account minimums as low as $100. As we mentioned above, millennials are cash conscious and don’t have a lot in their bank account to start investing with – so that’s music to many of their ears. RA’s can offer sophisticated investment services with low minimum investments for a few reasons.

Firstly, since the back end processes are all automated, RA’s costs of handling a client with an account balance of $100,000 are the same as handling one with a $100 balance.

Secondly, some RA’s have the ability to buy fractional shares from brokers. Some large brokers provide this service due to their technology and the volume that they handle (your daily dose of financial jargon, that’s as technical as this post gets). However, this wasn’t always available to investors of all sizes. While we’d all like to have $100,000 in savings, we don’t. RA’s know that, and they’re here to cater for the other 99%.

3. Liquidity

Millennials can be commitment-phobes. Far from buying homes, this generation is not even renting. The percentage of this demographic – aged around 18 to 35 – who end up living with their parents has been increasing steadily since the Great Recession, peaking at about 36% last year.

They may also be taking this fear of commitment to their investment thesis as well. A Bloomberg survey of millennials found that they only wanted to lock up their money with a max one-year investment commitment.

Luckily for this generation, robo-advisors generally invest in highly liquid and low-cost funds. These funds are typically traded millions of times a day. Clients can therefore request to fund or withdraw money from their account at almost any time.

Funding can take as little as one day and withdrawals can be received in as little as 4 days. No lock up period, no exit fees. Simple.

4. Convenience

Technology is continually reshaping the lives of millennials. Need a ride? Tap an iPhone to order. Need to deposit a check? Take a photo with your phone.

Robo-advisors provide a simplified wealth management service with generally low costs

that meets expectations millennials have with technology to simplify their lives. They can get started fairly quickly. There’s no need to schedule calls and meetings during the day, no small talk, and no need to fill countless forms.

In most cases, all they need to do is answer a quick risk questionnaire, which enables the RA to recommend an optimal and diversified portfolio to suit the client’s risk profile. It’s broken down to make the process as efficient as possible. Most importantly, clients can view their positions at any time, in nearly real-time.

For American Muslims Wahed is Changing the Game in Halal Investing

While it’s easy to group all millennials into one basket, we also need to consider that we can’t typecast millennials as all having the same needs, wants and desires. Muslim millennials for instance, have certain needs to be met to ensure their investments are Halal.

While online investing may seem unorthodox to some American Muslims, Muslim millennials in the U.S. have been interested in digital investment services and computer-generated, wealth management advice for some time. To date, they have been forced to use automated investment platforms that don’t mirror their beliefs. Wahed offers clients a solution to invest online in a way that is both sophisticated and true to their identity.

With Wahed, they can start with just $500 and get access to a variety of investments, including Sukuks or Islamic Bonds. We automatically rebalance portfolios so you don’t have to worry about managing your investments. Furthermore, clients can have peace of mind knowing that their money is being invested ethically as our Ethical Review Board monitors all investments to ensure they are Halal.

Finally, millennials will also be investing in socially responsible companies, whose missions include improving our communities!

Are you looking to invest ethically as you enter your mid-to-late twenties or thirties? Start investing with Wahed today.


  • Danish

    I’ve been waiting for something exactly like this! Very excited to get started.

  • Mohammed

    I am interested in investing Halal Way
    I live in England UK and I am 64 years old
    Next year in few months time July 2018 I will be retiring age 65
    I am interested in long and short term investments
    Want are the charges if Invest with UK £s
    Do you have branches in UK
    Can Someone with Halal Way knowledge contact me.
    Thank You
    Mohammed Hawa

  • admin

    Hello Mohammed, we are actually going to be launching in the UK very soon! Currently, we are only on-boarding US clients. A member of the team will be reaching out to you shortly.

  • Nasir Hussain Irshad

    Assalamualaikum, my name is irshad and i am from india I am interested in halal investment, i am a self oriented person and i am 29 years old, please advice me and explain me how to invest.

  • Rajab

    this is really great bt i stay in Uganda, how can i be helped to invest, do u already have some offices?

  • Wahed Support

    Hello Nasir, thank you for your interest! We are currently on-boarding US clients only, but planning to expand internationally in 2018. However, you can see how our portfolios look like by signing up here https://wahedinvest.com/app/home/register

  • admin

    Hello Rajab, thank you for your interest! We are currently on-boarding US clients only, but planning to expand internationally in 2018. However, you can see how our portfolios look like by signing up here https://wahedinvest.com/app/home/register

  • OLA

    Salam Alaikum Waramatulahi Wabarakatuhu.

    I am interested in your investment, and I will like to know more about it. I am based in Ghana and would like to know if you have any office in Ghana or Nigeria.

  • mukhtar umar

    thank you very much waheed investment for the showing concern to the muslism ummah and i pray for you the large reward from Allah as promised and also we are awaiting of your great achievement in this coming 2018 as you promise us particularly non american citizen thank you God bless you.

  • Wahed Support

    Wa Alaikum Assalam Ola, thanks for reaching out! We’re currently only on-boarding clients in the US but will be expanding internationally soon. Feel free to register at https://wahedinvest.com/app/home/register to stay informed!

  • Abrarul Hasib

    Assalamualaikum. I live in the US and am interested in halal investment.

  • munzali m suraj

    l only want to say thank u for your consideration to this great cause.

  • Wahed Support

    Wa Alaikum Assalam Abrarul, we sent you an email with more information and how to proceed – please let us know if you have any questions!

  • adnan qureshi

    Assalam o alaikum,

    I would like to find out more about this investment option. I will greatly appreciate more info..

  • Wahed Support

    Wa Alaikum Assalam Adnan,

    We’ll email you more information shortly, thanks!

  • Lama Sayyed

    Asalamu alaykum jazakum Allah kol kheir I been praying for this ! I’m a young intrepenuer and looking for Muslim investors for my businesses . Or a halal way to fund them Insha’Allah. Please advice me on this as I been holding back for a long time waiting for halal money to start off Insha’Allah!

  • admin

    Thank you Lama for your kind words! We are an investment platform and we help people invest their money in a halal manner. Please email us at [email protected] if you have any questions.

  • Marvin Eustaquio

    Hi! I am from the Philipiines but working now in Dubai. Do you have options for me if i wanna invest also? Thank you and more powrer!

  • admin

    Hello Marvin,

    Of course we do!

    To get started, please visit our website at http://www.wahedinvest.comand click on the ‘Free Portfolio Recommendation’. The report will show you how your potential portfolio would look like.

    Please let us know if you have any questions, we’re happy to help!


    Team Wahed

  • Ibrahim Yusuf

    Salaamun alaikum, I have successfully registered an account I think December 2018 but yet to fund it due to unforeseen circumstances. I am hopeful the account will not be frozen due to inactivity.

  • biliaminu saleem

    currently am in Nigeria. can i also invest and what are my gains

  • Wahed Editors

    Salaam Ibrahim, you can keep an active account with Wahed without having to pay any fees. We also do not freeze or deactivate any account without your approval or request. Hope this helps!

  • Eman

    Can you expand on how and when the fee is charged? Is it based on just the gains on the account? Or will I be charged just for having money in my account, even if there is a loss? Thank you!

  • Wahed Editors

    Salaam Eman,

    Wahed only has one simple, transparent annual fee, which is charged monthly. It includes all management, trading, admin and brokerage fees.

    This fee will be based on your account size or portfolio value. To learn more, you can visit our website’s PRICING page and for any further questions, email us at [email protected]

  • Abdulrauf Abdullahi

    Waalaykumussalam you are highly welcome brother, the fact about investing is actually Waheed invest i no you will ask why? this is because it is Sharia complaint,all what i will say is that you should read more about waheed and inshallah you will see the benefits.

  • Wahed Editors

    Hello Abdulrauf, Thank you so much for your support! We hope to serve more of our Muslim brothers and sisters and provide efficient, accessible and ethical investing.

  • Abbas Abdul Wahab

    Very good article

  • Yair

    Please contact me on Whatsapp: 44 7379 059887
    I would love to talk with you guys 🙂

  • Wahed Editors

    Hello Yair,

    Thank you for your interest in Wahed. We have forwarded your details to our UK support team and someone will get in touch with you shortly.

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