Julian Ferguson, an early client of a robo-advice service, with his girlfriend Celine. He also set up an automatic debit to add to his portfolio every fortnight from his pay "before I miss it". He now has a little over $50,000 invested - so far from deposits rather than growth - and he estimates he pays about $400 in fees a year. When he held shares, he found it difficult to keep track of them. "With shares, you also get emotionally invested; you are meant to buy low and sell high, but I found I was doing the opposite." "They [Stockspot] take care of rebalancing, so I can set and forget. At tax time, I get an automated report to give to my accountant and when my balance reached a certain threshold, I got an email telling me it was time to reassess my risk profile." Julian's experience could soon become mainstream. The future of automated financial advice, or robo-advice, is barrelling towards us faster than we realise.

Ignition Wealth's iPad app allows investors to check their portfolios from the comfort of their couchs. "We expect robo-advice will be as common as online banking and it's happening very quickly," says Mark Fordree​, chief executive of robo start-up, Ignition Wealth. Picture this scene: it's Saturday afternoon and, after a hectic working week, Jane is sitting on the sidelines watching her son, Tom, play cricket. She takes out her smartphone to check her messages. This is what pops up: "Hi Jane, did you know that if you invested the $5000 in your transaction account into Tom's education fund, you could reach your target savings 12 months earlier?" And this: "We have analysed your super fund and found that if you were a member of fund X you would be 10 per cent better off in terms of fees and performance. Would you like us to transfer your account to fund X? We just need your fingerprint for authorisation." We're not quite there yet, but it won't be long before you will be able to check your smartphone to see your financial position at a glance. Your bank accounts, super, mortgage, investments, income and debts will be displayed in one place. Your accounting and self-managed super fund software will also be linked to streamline tax and other reporting.

As more of our personal data and behavioural habits are captured and analysed online, it won't be long before robo-advisers are everywhere behind the scenes, keeping our personal finances sorted. Behind the scenes, a sophisticated computer algorithm will join the dots. It will suggest the best place to put your money and nudge you when to buy, sell or sit tight, based on your personal financial circumstances, attitude to risk and previous behaviour. What's out there? According to a report by Citi, robo assets could grow to $US13.5 trillion ($18.7 trillion) globally within a decade from a standing start in 2012. In the process, robo-advice could do to the traditional wealth management industry what Airbnb did to accommodation and Amazon to retail. But we're not there yet. Australia is experiencing the first wave of robo-advice and early movers are gingerly testing the waters.

First in are small financial technology start-ups such as Stockspot​, Decimal, Ignition Wealth and Clover, which recently teamed up with EquipSuper to provide a service for members. National Australia Bank has a tool for existing clients while Macquarie Bank is about to wade in with a robo-adviser not restricted to its own products and open to all-comers. These early entrants are focused on general investment advice, not comprehensive financial advice. For example, they won't consider your debts or tax position. What do they offer? When you log in, you are generally asked to enter personal details such as age, gender, income, assets, attitude towards risk and financial goals. Your virtual adviser will then provide you with suggested investments based on your stated goals and risk profile. Clover chief executive, Harry Chemay​ says this goal-based approach is the investment equivalent of a GPS system. "Clients tell us their goals and we tell them a really efficient way to get there", he says.

Robo-advisers say they offer simplicity, transparency and low fees by removing layers of advice and product platforms offered by traditional advisers. The industry regulator, ASIC, tends to agree. ASIC chief Greg Medcraft​ said in a recent speech: "We also see benefits such as improved compliance and record keeping and the potential to reduce conflicts of interest." At present, most robo-advisers achieve this by limiting their investment options to exchange-traded funds (ETFs), which track a particular index, market or market sector for a low fee. In the near future, it's likely robos will also offer direct shares, actively managed funds and term deposits. According to Ian Dunbar, founder of Afiniation​, which consults to the financial technology sector, robo-advisers are "very close" to being able to provide more sophisticated, comprehensive advice for products such as insurance and transition to retirement pensions. The fee structure for robo-advice varies. For example, Stockspot charges an annual fee of $77 and monthly fees of between 0.044 per cent and 0.077 per cent of assets under management. Ignition charges a flat fee monthly fee of $15 plus brokerage for portfolios under $25,000 and double that for larger account balances. Macquarie plans to charge for advice, but not asset management. Who's it for?

Robo-advice targets the 80 per cent of Australians who don't get advice because they find it expensive or they are wary of the scandal-plagued financial planning industry. That's not the whole story, though. Unless you have more than $250,000 to invest, most financial planners are not interested in you. That leaves a wide open field for new players to plough, powered by low-cost technology that makes servicing ordinary folk profitable. Robo-advisers will accept clients with as little as $1000 to kick-start an investment portfolio. "They're all chasing the whales, but their garbage is our gold", says Fordree, who thinks robo-advice could double the investment pool within five years. According to US robo-pioneer Betterment, its average customer is a 30-something professional on $US150,000 a year. Local start-ups are also targeting these Millennials and Gen-Xers who prefer to interact with their smartphone in real time than book a face-to-face appointment. "There's really nothing to cater for younger Australians, such as people in their 30s and families who are focused on their kids, mortgage and holidays," Chemay says.

"If your goal is to save $20,000 to take the family to Disneyland in five years' time, then robo-advice could provide a simple tool to help them reach their destination," he says. But it would be a mistake to write off older investors. According to a report by Ignition and FinDigital, the fastest-growing market for robo-advice globally is investors aged 60 and over. Glenn Korn​, spokesman for the Retirement Planning Association says there is a large untapped audience of pre- and post-retirees who lost money in the global financial crisis and were left bewildered and angry by the advice – or lack of it – they were given at the time. "They are looking for direction and financial education, not advice; that's why robo-advice caught our eye," says Korn, whose association recently partnered with Ignition. "If your risk profile says you should have 35 per cent equities but you've got 65 per cent now, the penny might drop." How does it fit in?

Some robo-advisers provide the opportunity to speak to a phone-based adviser or a full-service financial planner for more complex issues such as estate planning or setting up a family trust. Some advisers might use a robo-advice tool themselves. "I don't think robos will replace advisers, but it will assist financial planners to engage with clients they otherwise wouldn't and let an algorithm do the heavy lifting in portfolio construction and rebalancing over time," Chemay says. He argues machines are far better at tasks such as portfolio construction and periodic rebalancing, leaving the planner free to deal with more complex issues. But this, too, could change. Stockspot provides an inkling of what's in store. During a recent sharemarket sell-off, it monitored how often its clients were logging in. "This gives us an idea how nervous they are," chief executive Chris Brycki​ says. Based on this intelligence, some clients received an automated message about market volatility and why that's normal to prevent them from panic selling.

"The behavioural aspect is one of the biggest opportunities for robo-advice", Brycki says. He says human advisers have the same cognitive biases as everyone else, which is why so many failed their clients during the global financial crisis. Robots, on the other hand, play it by numbers, not emotion. As more of our personal data and behavioural habits are captured and analysed online, it won't be long before robo-advisers are everywhere behind the scenes, keeping our personal finances sorted. Action plan Robo-advisers offer general advice only, not comprehensive financial advice. If you need complex advice you still need to consult a human.

Investment options are generally limited to exchange-traded funds, so make sure you understand what's on offer.

Look for an independent robo-adviser that offers investments from a wide range of product providers, not just their own.

Fees structures differ from one robo-adviser to the next, so check the fine print.

Test drive a few robo-advisers before you commit. Many of the risk profiling and other educational tools are free.