There is nothing new about the idea of investing using computers.

In the relatively short time that we’ve had electronic computers (~ 75 years) we’ve quickly moved to a baseline of expectations that accepts computers are good tools that can help us with investment decisions. Now a new wave of startups is automating the process further offering a what the Wall Street Journal calls ‘roboadvisors.

Using a questionnaire the roboadvisor assesses the investors level of risk and then selects a mix of low fee exchange traded funds that track stock and bond indexes. The mix is automatically adjusted to maintain a steady asset mix and account of tax efficiency. Management fees are lower than traditional advisors and brokers.

No word yet on the effectiveness of these tools but the promise is just what we expect from innovation – increased value!