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DIY or hands-off? Robo-advisors vs. self-directed investing explained
93
Robo-advisors
0.25%
Lowest fee
€1
Min investment
Mar 2026
Updated
What are robo-advisors?
What is a robo-advisor?
A robo-advisor is an automated investment platform that builds and manages a diversified portfolio for you. You answer a few questions about your financial goals, risk tolerance, and time horizon, and an algorithm creates a personalized mix of low-cost ETFs. The platform then handles everything: rebalancing when your allocation drifts, reinvesting dividends, and in some cases, tax optimization.
Think of a robo-advisor as a digital financial advisor that works 24/7 but charges a fraction of what a human advisor would. Traditional financial advisors typically charge 1-2% of your portfolio annually. Robo-advisors charge 0.25-0.75%, and the underlying ETFs add another 0.10-0.30%. Your total cost is usually under 1% per year.
Who are robo-advisors for?
Robo-advisors are ideal for three types of investors. Beginners who want to start investing but do not know how to build a portfolio. Busy professionals who want their money invested intelligently without spending time managing it. Hands-off investors who know they should invest but tend to make emotional decisions when markets drop. If you want to "set it and forget it," a robo-advisor is probably your best option.
Robo-advisors vs DIY ETF investing
If you are comfortable choosing your own ETFs and rebalancing annually, you can save the 0.25-0.75% management fee by doing it yourself on a platform like DEGIRO or Trade Republic. The question is whether the convenience, automatic rebalancing, and behavioral guardrails of a robo-advisor are worth the fee to you. For most people, especially those starting out, the answer is yes.
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Frequently asked questions
For beginners and hands-off investors, yes. The 0.25-0.75% annual fee covers automatic rebalancing, tax optimization, and portfolio construction. If you would otherwise leave your money in a savings account earning 2-3%, a robo-advisor investing in global ETFs can significantly improve your long-term returns even after fees.
When you sign up, you answer questions about your financial goals, time horizon, and risk tolerance. The algorithm then builds a portfolio from low-cost ETFs matching your profile. A conservative investor might get 70% bonds and 30% stocks, while an aggressive investor might get 90% stocks and 10% bonds.
Yes. Robo-advisors invest in stocks and bonds, which can lose value. However, they diversify across thousands of securities to reduce risk. Historically, a globally diversified portfolio has always recovered from downturns if held for 10+ years. The risk depends on your chosen profile.
Your investments are held by a custodian bank, separate from the robo-advisor's own finances. If the robo-advisor closes, you can transfer your ETFs to another broker. Your money is also protected up to €20,000 under the EU Investor Compensation Scheme.
Brand New Day and Meesman are the most popular choices for Dutch investors, offering low-cost index fund portfolios with tax-efficient structures. For broader European access, Scalable Capital offers more flexibility and a wider range of investment strategies.
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