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Robo-advisors, sometimes known as automated online advisors or digital investing services, are technology-based investment platforms that offer fully automated online investing.

If you want a hands-off approach to investing, robo-advisors are an obvious choice. And these days, the top robo-advisors offer useful tools like automatic rebalancing and consider your financial goals when picking investments.

However, this is a crowded market, and it’s not always easy to make the right choice. That’s why our list of the best robo-advisors is covering some of our top picks for different types of investors.

Quick Recap of the Best Robo-Advisors

Here’s a quick recap of the best robo-advisors currently in the investing space and how they stack up against each other. We’ve thoroughly reviewed and tested each robo-advisor service listed below.

  1. Wealthfront — Best Overall
  2. Betterment — Best For Beginners
  3. SoFi — Best For Fees
  4. M1 Finance — Best For Experienced Investors
  5. Vanguard Digital Advisor — Best For ETF Investing
  6. Blooom — Best For 401(k) Management
  7. Schwab Intelligent Portfolios — Best Broker-Provided Robo-Advisor
  8. Interactive Advisors — Best For Socially Responsible Investing

Best Overall: Wealthfront

Our Score: 9
Minimum Deposit: $500
Annual Fees: 0.25%
Human Advisor Access: No

Wealthfront Logo

Best For: Wealthfront offers robo-advising products that work well for the needs of a wide range of investors, from beginners with no investment experience to experts looking to fine-tune a portfolio that’s kept in line by automatic systems.

The automated investing product suggests an ideal portfolio based on your profile but gives you plenty of customization options with more than 200 available exchange-traded funds (ETFs). You can choose a classic portfolio, a socially responsible portfolio, or customize your own.

Taxable accounts can save with automated tax-loss harvesting, and those with $100,000 or more can tap into direct indexing for further investing efficiency.

Potential Drawbacks: Wealthfront uses a simple, flat fee structure which means larger accounts pay higher fees. And if you want access to a human advisor, Wealthfront isn’t for you. This is a software-only robo-advisor regardless of your account balance.

Fees: Wealthfront uses a flat fee of 0.25% of assets under management, automatically deducted from your account. For taxable accounts, it claims most users save more on taxes than the annual cost of the account.

Pros:

  • Wide range of available ETFs
  • Simple fee structure
  • Control over your portfolio composition
  • Tax-loss harvesting for taxable accounts

Cons:

  • No access to human advisors
  • No fractional shares

Sign Up For Wealthfront | Wealthfront Review


Best For Beginners: Betterment

Our Score: 9
Minimum Deposit: $0
Annual Fees: 0.25% – 0.40%
Human Advisor Access: Yes

Best For: Betterment is one of the simplest robo-advisors you can use. After filling out a brief investment profile and questionnaire, you decide how much you want to invest and Betterment takes care of the rest.

Betterment offers two products: a basic investment service that’s great for beginners and an upgraded service where you can access a financial advisor for a higher fee. Betterment works with several types of taxable and retirement accounts, and taxable accounts get automated tax-loss harvesting.

It also offers members a helpful all-in-one dashboard to view all of their financial accounts, including accounts outside of Betterment.

Potential Drawbacks: The most significant drawback at Betterment is its cost. The standard account charges an annual fee based on your investment balance. If you have at least $100,000 with Betterment, you can upgrade to the full financial advising service with a human advisor, but this costs even more.

Fees: The standard “Digital” account at Betterment costs 0.25% per year. The Premium plan requires a higher 0.40% annual fee. Digital plan customers can get a session with an advisor for a one-time fee of $299-$399.

Pros:

  • No minimum account requirement
  • Very easy to use
  • Betterment offers other services like cash accounts
  • Uses tax-loss harvesting

Cons:

  • High balance requirement for Premium Investing
  • Expensive one-time fees for meeting an advisor

Sign Up For Betterment | Betterment Review


Best For Low Fees: SoFi Automated Investing

Our Score: 8.5
Minimum Deposit: $5
Annual Fees: $0
Human Advisor Access: Yes

SoFi Investing

Best For: If you want to avoid steep fees, SoFi is one of the best robo-advisors you can use. In fact, this automated investing account doesn’t charge annual fees. And you only need $5 to begin investing, making it very beginner-friendly.

Like many other robo-advisors, SoFi Automated Investing builds portfolios with a mix of ETFs that match your investing goals and risk tolerance. You can open an individual account as well as tax-advantaged accounts like IRAs

SoFi also provides automatic rebalancing and lets you set and track progress towards multiple financial goals. Human financial planners are also available if you have questions at no extra cost.

Potential Drawbacks: Unlike some more established robo-advisors, SoFi Automated Investing doesn’t offer tax-loss harvesting. And SoFi also tends to invest in some of its own ETFs alongside ones from other companies. This wouldn’t be an issue, but many SoFi ETFs have incredibly high fees in the 0.29% to 0.49% range.

Fees: SoFi Automated Investing doesn’t charge annual fees. However, be careful with how much of your portfolio invests in SoFi ETFs since many of these have steep fees.

Pros:

  • No annual fees
  • $5 investing requirement
  • Human advisors are available

Cons:

  • Many SoFi ETFs have high fees for ETFs
  • No tax-loss harvesting

Sign Up For SoFi | SoFi Wealth Review


Best For Experienced Investors: M1 Finance

Our Score: 8.5
Minimum Deposit: $100
Annual Fees: None
Human Advisor Access: No

M1 Finance logo

Best For: M1 Finance is an excellent robo-advisor if you have investing experience and want more control over your portfolio. This is because M1 lets you choose from over 60 M1 expert portfolios or make your own portfolio of stocks, ETFs, and expert-curated portfolios.

The interface at M1 Finance works with “Pies,” a pie chart showing your portfolio allocation. You can customize your pie to contain any supported investment, and M1 works to maintain your portfolio composition over time.

M1 also supports fractional shares starting at just $1 and works with several account types, including individual, joint, and IRAs. M1 doesn’t charge any management fees for accounts, but some portfolios and less common services require a fee.

Potential Drawbacks: While there are professionally designed portfolios for beginners, newer investors may find picking their investments a little intimidating. It’s still a simple process, but if you don’t know what an investment fund is, it could still be a little more work than most robo-advisors.

Fees: M1 Finance doesn’t charge any commissions or trading fees, and there isn’t a recurring account fee. The only costs you pay are for specific investments, which are disclosed on the investment screen. There’s also an inactivity fee of $20 if you don’t use your account for 90+ days.

Pros:

  • Provides more control over your portfolio
  • Supports fractional share investing
  • No annual fees

Cons:

  • No tax-loss harvesting
  • No access to human advisors

Sign Up For M1 FinanceM1 Finance Review


Best For ETF Investing: Vanguard Digital Advisor®

Our Score: 8.5
Minimum Deposit: $3,000
Annual Fees: Approximately 0.20%
Human Advisor Access: No

Vanguard personal advisor services - review

Best For: Many leading robo-advisors invest a portion of client assets in Vanguard ETFs. After all, Vanguard manages some of the world’s largest mutual funds and ETFs and has a reputation for providing excellent low-cost ETFs. And with Vanguard’s robo-advisor service, you can automatically invest in these same ETFs for diversification and low fees.

Vanguard Digital Advisor also lets you tackle multiple financial goals at once. It does this by pooling assets across your taxable accounts to fund goals. And as you get closer to certain goals, Vanguard can shift resources around and even change your portfolio composition to be slightly more conservative to reduce risk.

Plus, you can also include accounts you have at other companies to make sure you have a comprehensive picture, though they won’t be managed. And you can get access to their debt calculator to help you consider a strategy to pay off your loans.

Potential Drawbacks: The $3,000 account minimum for Vanguard Digital Advisor is higher than many robo-advisors. You don’t get tax-loss harvesting either.

Fees: Vanguard waives fees for its robo-advisor service for the first 90 days. Afterwards, it charges approximately 0.20% annually.

Pros:

  • Extensive number of ETFs available
  • Vanguard is a pioneer in the low-cost ETF space
  • Dynamic portfolios help you work towards multiple financial goals and reduce risk

Cons:

  • $3,000 minimum balance requirement
  • No tax-loss harvesting
  • No access to human advisors

Sign Up For Vanguard Digital Advisor | Vanguard Digital Advisor Review


Best For 401(k) Investing: Blooom

Our Score: 8
Minimum Deposit: $0
Annual Fees: $45 to $250 per year
Human Advisor Access: Yes

Blooom

Best For: If you want to check the health of your 401(k) or IRA plan — and fix it — check out Blooom. This unique robo-advisor can monitor and manage your 401(k), 401(a), 403(b), 457, or TSP plan to ensure your investments line up with your long-term goals.

Blooom’s main strength is that it helps minimize fees. This is important for employer-sponsored investment plans where a lack of options often leads to investments that charge higher fees.

The basic plan costs $45 per year and gives access to a personalized portfolio and fund recommendations to help lower fees. Two other plans are available for $120 and $250 per year. These plans add in more features like portfolio auto-optimization, human advisor access, and priority support.

This isn’t the best robo-advisor for everyone. But if you want to optimize your retirement accounts, Blooom is worth considering.

Potential Drawbacks: Blooom’s flat fee pricing means small portfolios pay a steep annual fee versus percentage-based robo-advisors. And if you want a robo-advisor for a taxable brokerage account, Blooom isn’t for you.

Fees: Blooom’s annual plans cost $45 to $250 per year.

Pros:

  • Simple pricing structure
  • You don’t need employer approval to use Blooom since Blooom doesn’t control your account

Cons:

  • Only available for retirement accounts
  • Fixed-fee structure is expensive for small portfolios

Sign Up For Blooom | Blooom Review


Best Broker-Provided Robo-Advisor: Schwab Intelligent Portfolio

Our Score: 8
Minimum Deposit: $5,000 or $25,000 depending on plan
Annual Fees: None
Human Advisor Access: Yes

Charles Schwab

Best For: Charles Schwab is a popular broker that also offers a robo-advisor Schwab Intelligent Portfolio. With portfolio rebalancing and tax-loss harvesting, it’s a comprehensive robo-advisor that helps optimize your portfolio automatically. Just note tax-loss harvesting is for accounts with $50,000 or more in assets.

Schwab Intelligent Portfolio provides a range of ETF investments to match your goals and risk tolerance. You can also invest in other asset classes like real estate, precious metals, and bank loans.

Furthermore, you don’t pay advisory fees or commissions. But if you want unlimited access to a financial planner, you need Schwab Intelligent Portfolios Premium. This charges a $300 signup fee and $30 per month fee. Premium also requires a minimum balance of $25,000.

Potential Drawbacks: Schwab Intelligent Portfolios has a high minimum account requirement, and this is the main drawback.

Fees: You don’t pay annual fees with Schwab Intelligent Portfolio. However, Schwab Intelligent Portfolio invests in Schwab ETFs, which have fees like other ETFs. Expect to pay 0.05% to 0.25% depending on the ETF.

Pros:

  • No annual fees
  • Variety of investment options
  • Access to human advisors with Premium

Cons:

  • High minimum account requirements, especially for Premium
  • High balance requirement for tax-loss harvesting

Best For Socially Responsible Investing: Interactive Advisors

Our Score: 8
Minimum Deposit: $100
Annual Fees: 0.08% to 1.5%
Human Advisor Access: Yes

Interactive Advisors Logo

Best For: Interactive Advisors is a robo-advisor service from Interactive Brokers, one of the leading brokers for trading options, stocks, and ETFs.

What makes Interactive Advisors unique is its range of pre-built portfolios you can invest in. Investing themes include healthcare, technology, growth, small cap, and many other investing concepts. And there are also numerous socially responsible investing (SRI) themes, like social justice or creating a better planet.

You’re still investing in fractional shares and ETFs with your portfolio. But the variety of SRI and ESG investing options is what makes this robo-advisor stand out. And if you need help, you can call a investment advisor during weekday business hours with your questions.

Potential Drawbacks: Some portfolios have high annual fees versus other robo-advisor investments. And if you aren’t looking for SIR or ESG investing, there isn’t the right robo-advisor for you.

Fees: Asset-based management fees range from 0.08% to 1.5% annually. It’s important to read portfolio information carefully so you know how much fees are.

Pros:

  • Extensive list of SRI and ESG portfolios
  • Other investing themes are also available
  • Access to human advisors

Cons:

  • No tax-loss harvesting
  • Some funds have very high fees

How Do We Rate Robo-Advisors?

The Investor Junkie team has spent a lot of time with the top robo-advisors, evaluating each one to help our readers make informed choices about which service best suits their needs. So how do we judge them?

When rating robo-advisor services, we take a close look at six crucial criteria:

  1. Commissions & Fees: How much does the robo-advisor charge its users to use its service? Is there a good value for your money?
  2. Tools & Resources: Besides just investing your money, what research, calculators, planning programs, etc., does the robo-advisor offer to help you maximize your investing experience?
  3. Customer Service: How can you access the customer service team, and when? Does the robo-advisor have a call center open on the weekend? Can you access help via live chat?
  4. Investment Options: What kinds of accounts can you invest in with the robo-advisor? Does it offer both taxable accounts and IRAs?
  5. Ease of Use: Does the user interface make sense? Does it have a seamless mobile app? What kinds of accessibility options does the robo-advisor offer?
  6. Asset Allocation: How does the robo-advisor’s algorithm consider asset allocation? Can it invest in a diverse portfolio with commodities, real estate, etc., as well as ETFs and mutual funds? And is the asset allocation automatically rebalanced?

Taking into consideration the criteria above, we have selected a few that consistently score high marks. Read more about what is a robo-advisor here.


 

Aren’t All Robo-Advisors the Same?

The differences among robo-advisors might seem minor to the casual reader, but in reality, they’re not. You have a choice when it comes to:

  • Minimum Deposit: With some firms, you can start out with nothing, while others require sizable amounts to invest.
  • Annual Fees: Be aware of hidden costs and fees for the ETF a robo-advisor purchases on your behalf.
  • Asset Allocation: Asset allocation can vary quite a bit based on your age and how you answer the service’s risk assessment questions.
  • Account Type Support: Does the robo-advisor offer individual or joint accounts, IRAs, etc.? Similarly, can it assist with your 401(k) plan?
  • Automation: Some services are 100% automated vs. human-assisted advice.
  • Tax Optimization: Services such as tax-loss harvesting can help at tax time.
  • Custody of Funds: Managed either by you, in which case the robo-advisor gives trading advice, or directly by the firm.
  • Management of Assets: Manage all your assets or just a portion.
  • End Goal: Retirement-only or other goals (e.g., college education).

How to Choose a Robo-Advisor

The best way to choose a digital investment advisor is to start with your needs and then match up your preferences with the best robo-advisor for you.

For example, you might want a plain-vanilla robo-advisor with low fees that will invest your money in a diversified mix of stock and bond funds, in line with your risk level. In this case, you can’t go wrong with beginner-friendly robo-advisors like Wealthfront or Betterment.

For investors who must have a human financial advisor, a robo-advisor with a human touch is the way to go. This option is like the “have your cake and eat it too” approach to investing. Robo-advisors like Betterment and Schwab Intelligent Portfolio are great choices here.

And for more specialized scenarios like 401(k) investing or SRI investing, you can turn to options like Blooom and Interactive Advisors respectively.

Finally, always consider annual fees and fund fees when choosing a robo-advisor. Remember, robo-advisor fees are only for its services — it doesn’t include the fees on the ETFs it purchases on your behalf. If you’re curious, I’ve researched the popular robo-advisors and broken down each’s true annual costs.

Bottom Line

The universe of robo-advisors is large and growing. It’s easy to get sidelined by the many choices. Narrow your search by homing in on what you really want in an investment manager.

Finally, the benefits of investing with a robo-advisor, including low fees and professional management, will be irrelevant if you don’t get started. So do a robo-advisor comparison and start out with the one that best fits your needs.

Vanguard Disclosure
For more information about Vanguard funds and ETFs, visit vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing. All investing is subject to risk, including the possible loss of the money you invest.

Vanguard Digital Advisor® services are provided by Vanguard Advisers, Inc. (“VAI”), a federally registered investment advisor. VAI is a subsidiary of VGI and an affiliate of VMC. Neither VAI nor its affiliates guarantee profits or protection from losses.

Vanguard Digital Advisor is an all-digital service that targets an annual net advisory fee of 0.15% across your enrolled accounts, although your actual fee will vary depending on the specific holdings in each enrolled account. To reach this target, Vanguard Digital Advisor starts with a 0.20% annual gross advisory fee to manage Vanguard Brokerage Accounts. However, we’ll credit you for the revenues that The Vanguard Group, Inc. (“VGI”), or its affiliates receive from the securities in your managed portfolio by Digital Advisor (i.e., at least that portion of the expense ratios of the Vanguard funds held in your portfolio that VGI or its affiliates receive). Your net advisory fee can also vary by enrolled account type. The combined annual cost of Vanguard Digital Advisor’s annual net advisory fee plus the expense ratios charged by the Vanguard funds in your managed portfolio will be 0.20% for Vanguard Brokerage Accounts. For more information, please review Form CRS and the Vanguard Digital Advisor brochure.

Vanguard Marketing Corporation, Distributor of the Vanguard Funds.




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