A robo advisor lets investors open a goal, answer a questionnaire and invest in a model portfolio through an app, with the portfolio kept on target over time. For a bank, broker, wealth manager or asset manager, it is a way to offer digital wealth management to clients who would not book a meeting with an adviser.
The software is the smaller decision. The larger one is how your institution will assess suitability, supervise portfolios and onboard clients.
Who is responsible for a robo advisor?
Your institution is. The bank, broker or wealth manager that offers the robo advisor holds the licences and stays accountable for its portfolios and clients. Quantaint provides software and services. It is not licensed by the SEC or any other market authority, and it does not provide the regulated service.
Before you plan anything else, confirm with your compliance team which permissions your offering needs and what rules apply to automated advice where you operate. The rest of this checklist assumes those answers are in hand.
How should the suitability questionnaire and risk score work?
Suitability starts with the questionnaire, so your institution should write it. Typical questions cover how long the money can stay invested, how the client would react to a fall in value, how steady their income is and what they have invested in before.
In Quantaint's Robo Advisor, your institution writes the questionnaire and its scoring. The score decides which model portfolios an investor may adopt, because each portfolio carries a minimum risk score. An investor cannot open a goal on a portfolio their score does not reach.
Things to decide early:
- How answers translate into a score, and who signs that off.
- What happens when an investor's circumstances change and they need to answer again.
Who designs and supervises the model portfolios?
Your own investment team should, and the committee that designs them should also set the rules for monitoring them.
In Robo Advisor, your team builds portfolios by asset class or pins specific instruments. Portfolios can be public, or private and granted to named investors; private portfolios are never listed. Your investment committee writes the questionnaire, sets the minimum risk scores, sets drift thresholds and approves rebalancing.
The same control lets each institution follow its own investment policy. Because your team chooses the instruments, it can build portfolios to any criteria it sets, and institutions that offer Shariah-compliant products can build portfolios only from instruments they and their advisers have approved. Whether a portfolio meets a given standard is your institution's decision, not the software's.
How does goal-based investing work?
Investors save for specific things, such as a home, a child's education, retirement or a car, so the product should let them hold more than one goal. In Robo Advisor, each named goal has its own holdings, daily closes and performance line, and returns are time-weighted.
Every goal has a target amount, a date and a payment schedule, with progress, time to goal and the advised monthly contribution. Goals come from a closed list of 15 objectives, from a home, education and retirement to travel and Hajj or Umrah, each with a default horizon, so you can report cleanly on what clients save for. The platform tracks expected payments and never collects money itself. Investors can redeem a goal themselves when they need the money.
How do drift monitoring and rebalancing work?
Markets move portfolios away from target. Decide how far is too far and who approves the correction.
In Robo Advisor, drift is checked every day at asset-class level, instrument level or both, each with its own threshold. Rebalancing can be approved by your institution, by the investor, or run automatically, depending on the rule you choose. Buys are funded by sells, and every leg of a rebalance is a whole number of units sent through your broker.
Two further controls are worth asking any vendor about:
- Corporate actions. A split or dividend that has not been applied blocks trades on that instrument until it is.
- Instrument scores. Optional scores from 0 to 100 can weight instruments inside an asset class, within a floor and a cap. They are off by default and apply only once an admin accepts them.
What onboarding checks does a robo advisor need?
Decide which identity and AML checks your policy needs for each client type, and who reviews uncertain results.
Quantaint's Identity & AML arranges these checks into the flow your compliance team designs: identity documents, NFC chip reading, passive liveness, face match, proof of address and screening against sanctions, PEP and adverse media lists. Names are matched across scripts and transliterations, so a name written in Arabic and its English spelling are recognised as the same person. Possible matches go to your analysts and are never declined automatically, existing clients are rescreened when lists change, and every decision is kept on the applicant's record. Your institution makes the decision; the platform runs the checks and keeps the record.
Does the experience work in your clients' languages?
Investors should be able to read every screen and message in the language they choose. Robo Advisor works in English and Arabic, including right-to-left layout, numbers and names, and the onboarding flow is white-label and available in over 40 languages. Ask to see the questionnaire and a goal in each language you need during a demo.
What does white label mean for a robo advisor?
Investors should see your brand, not your software supplier's. In Robo Advisor, your institution runs the product and its storefront under its own brand and domain. The storefront lists your public portfolios by risk band, horizon and projection, without showing their composition.
Visitors leave a name, email and mobile before the questionnaire, so your team can follow up anyone who stops partway. The page registers interest, your team converts the lead, and direct clients can be onboarded from an assessed lead.