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Fortunly's Guide

The Best Robo-Advisors of 2021

By
G. Dautovic

October 18,2021


If you’ve avoided investing because it seemed costly and complicated, you’ll be happy to hear that both of these problems have been solved with the emergence of robo-advisors.

The terms “robo-advisor” and “automated investment manager” may sound high-tech, but the idea is quite simple. Investment companies are now using AI-powered financial advisors to help you select and invest in stocks, retirement accounts, and mutual funds.

Robo-advisors have quickly become mainstream, replacing the human financial advisors who have traditionally done this work. These tools have helped expand the market for consumers looking for low-cost financial advice.

Explore Fortunly's reviews below and find the best option for your needs.

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The Top 10 Robo-Investment Services: Summary

Account Minimum:
$100 (taxable account); $500 (IRAs)
Management Fee:
0%
Expense Ratio:
0.06%-0.20% of ETFs annually
Portfolio Rebalancing:
Automatic
Open Account
Offer details
Account Minimum:
$0 (Digital plan); $100,000 (Premium plan)
Management Fee:
0.25%-0.40% monthly
Expense Ratio:
0.06%-0.13%of ETFs annually
Portfolio Rebalancing:
Depends on the plan
Open Account
Offer details
Account Minimum:
$3,000
Management Fee:
0.15%
Expense Ratio:
0.05%
Portfolio Rebalancing:
Automatic
Open Account
Offer details
Account Minimum:
$100,000
Management Fee:
0.49% to 0.89% annually
Expense Ratio:
0.08% on ETFs annually (average)
Portfolio Rebalancing:
Automatic
Open Account
Offer details
Account Minimum:
$5
Management Fee:
$1-$5 monthly
Expense Ratio:
0.18% of ETFs annually (average)
Portfolio Rebalancing:
Automatic
Open Account
Offer details
Account Minimum:
$500
Management Fee:
0.25% monthly
Expense Ratio:
0.06%–0.13%of ETFs annually
Portfolio Rebalancing:
Automatic
Open Account
Offer details
Account Minimum:
$0
Management Fee:
0%
Expense Ratio:
0.03%-0.08% of ETFs annually
Portfolio Rebalancing:
Automatic
Open Account
Offer details
Account Minimum:
$0
Management Fee:
$1 – $9 per month
Expense Ratio:
0.05%-0.19% of ETFs annually
Portfolio Rebalancing:
Automatic
Open Account
Offer details
Account Minimum:
$0
Management Fee:
$45-$250 annually
Expense Ratio:
Not stated
Portfolio Rebalancing:
Automatic
Open Account
Offer details
Account Minimum:
$100-$50,000
Management Fee:
0.08%-1.5% annually
Expense Ratio:
Not stated
Portfolio Rebalancing:
Automatic
Open Account
Offer details
Evaluation Criteria

Picking the Right Robo Financial Advisor: Our Methodology

Determining which robo-advisor is the best fit for you depends on factors like your current portfolio, your investment goals, and your preferences in regard to having access to a human advisor. We considered these factors along with fees and features to come up with a list of the market’s top players. Here’s a more detailed overview of evaluation metrics we use when we write our reviews:

Account Types

Investment accounts come in many types, individual and joint brokerage accounts trusts, and more. Given that each account type offers different benefits, it’s important to determine which option best suits your goals and needs before signing up with a robo investment advisor.

Investment Strategies

Like traditional financial advisors, automated investing platforms instruct clients to base investment choices on factors such as how much risk they can comfortably bear, the level of returns they want, and when they might need the money. Based on these factors, robo-advisors design a portfolio of stocks, exchange-traded funds, and other instruments using proven investment-management strategies.

Some providers let their clients adjust goals and risk levels after the initial investment strategy is done.

Extensive research has revealed that portfolio diversification reduces risk and increases returns. That’s why most of these tools employ modern portfolio theory to create and manage clients’ investment portfolios.

Here’s a simple example of the best approach to invest money according to MPT: Instead of investing everything in a single fund, robo-advisors usually create diversified portfolios for clients. MPT is a framework that is intended to help financial advisors balance the client’s desire for a good return on their investments with their aversion to risk-taking.

Additional Services

Each provider on our list offers a few services. These can include the following features:

Goal-planning tools

Assistance for setting financial goals and tracking progress toward reaching those goals is one of the most important features offered by the U.S. robo-advisor market’s top competitors. The best providers even send reminders to help put you back on track should you drift away.

Certified financial planners

A CFP is a finance specialist who possesses rigorous certification for demonstrating knowledge in financial planning. CFPs often have years of experience, and combining their knowledge with the sophisticated algorithms of an automatic investing platform is one of the best ways to approach the complex world of investing. Top-rated robo-advisors offer the services of CFPs fee-free to their clients.

Tax-loss harvesting

Tax-loss harvesting is a tax-minimization strategy that focuses on selling assets that drop in value to offset a capital gains tax liability.

Typically employed to limit the recognition of short-term capital gains, which are taxed at a higher rate than long-term gains, this technique helps lower the investor’s overall tax liability. If done properly, tax-loss harvesting can maximize your financial gains in the long run. The leading robo-advisors offer this service at no cost.

Borrowing against portfolio on your behalf

Most of the providers on our list offer securities-based lending. In other words, these companies let their clients take out a loan (usually in the form of a line of credit) using their investments as collateral. The best thing about this type of borrowing is that approvals can be very fast and the cost can be quite low. It’s a good source of quick cash.

Fees and Commissions

One of the biggest advantages of robo investing advisors is that their services can be much less expensive than those of an in-person financial advisor.

While the charges vary from company to company, typically two major components determine the costs of a robo-advisor.

  • Management fee: This fee is usually paid on a yearly or monthly basis, and it ranges from 0.25% to 0.5% of assets per year. For example, a $10,000 investment account might be charged an annual management fee of $25 to $50. Some providers may impose higher or lower charges.
  • Investment expense ratios: The robo broker you choose to work with may invest your money in funds that charge fees based on your holdings. These costs can vary but usually average between 0.05% and 0.65% of the assets, incurring a $5 to $65 annual fee for every $10,000 invested.

Transactions - buying and selling funds, moving money out of your account, or changing your asset allocation - shouldn’t incur any extra costs. Still, before opening a robo-advisor account, make sure you’re fully aware of all the fees the company may charge you.

Lastly, when doing a comparison concerning cost, we also suggest you take minimum initial deposit requirements into account.

Customer Service

Robo-advisors with quick-to-respond and knowledgeable customer support representatives are great, especially if the customer service agents have extended working hours and can be contacted by users via multiple avenues of support. Just because they favor a tech-first approach doesn’t mean that robo-advisors can’t offer attentive customer service.

Quick Breakdown

The Best Robo-Advisor for 2021: Fortunly's Picks

  • M1 Finance - Best for flexible portfolio building
  • Betterment - Best for multiple investment strategies
  • Vanguard - Best for low-cost personal retirement plans
  • Personal Capital - Best if you are an experienced investor.
  • Acorns - Best if you have a hard time saving money
  • Wealthfront - Best for automatic portfolio rebalancing
  • SoFi - Best for low-cost investment options
  • Ellevest - Best for goal-based investing
  • Blooom - Best for managing a 401(k) account
  • Interactive Advisors - Best if you value a large investment selection.

Best Robo-Investment Advisors: Reviews

M1 Finance Review

Quick Facts
4 stars Our Rating
Account Minimum:
$100 (taxable accounts), $500 (IRAs)
Management Fee:
0%
Expense Ratio:
0.06%-0.20% of ETFs annually
Portfolio Rebalancing:
Automatic

Operating since 2015, M1 Finance can be described as a hybrid between a robo-advisor and traditional brokerages. With this provider, clients get all the benefits of automated portfolio management without having to give up on the control they would have with a traditional brokerage account.

If you don’t mind a hands-off approach - but would still like to be more involved in the decision-making process - M1 Finance may be a perfect fit.

Account Types

With M1 Finance, you can open an individual or joint taxable account; a retirement account such as a traditional, Roth, or SEP IRA; or a trust.

Investment Strategies

Getting Started

The Pie - M1 Finance’s unique approach to building and managing clients’ portfolios - is essentially a simple, transparent way to look at asset allocation. Here’s how it works.

First of all, you’ll be asked to choose individual investments and add them to your pie (one stock equals one “slice” of the pie). 
Then you’ll need to define how much of your portfolio you want to be dedicated to each slice (expressed in percentages). Next, you’ll fund your account.

From there, you’ll be able to follow the performance of your portfolio and see it rebalance automatically. One of the best things about this app is that it’ll also let you add, remove, and edit your slices.

Portfolio Management

M1 Finance has a huge selection of ETFs and stocks to choose from - nearly 2,000 ETFs and any individual stocks available on the Nasdaq or the York Stock Exchange. Considering that you can opt for any investment traded on these major exchanges, you’re left with an almost endless supply of options.

One of the nicest things about working with this robo-advisor platform is that the company lets you use fractional shares so that every single penny in your account can be invested.

Additional Services

Automation

One of M1 Finance’s biggest selling points is that it’s big on automating all the things that most investors don’t enjoy doing on their own. For example, this robo-advisor lets you set up recurring investments, it rebalances your portfolio automatically, offers built-in tax efficiency, and controls your cash balance.

M1 Borrow

One of the newest features available to M1 Finance clients, M1 Borrow is a program that lets you borrow up to 35% of the value of your portfolio at a competitive 3.75% interest rate. To put it simply - if you have $100,000 in your account, you can take out a loan up to $35,000 at a very low rate. Note that you’ll need to have a margin brokerage account with a minimum of $25,000 in it to be eligible for this service.

Fees and Commissions

As one of the cheapest options, M1 Finance doesn’t charge trading or monthly management fees. There are charges for deposits or withdrawals to a linked bank account, however. And regulatory and additional service fees (such as IRA conversion fees) may apply.

Stock-only accounts do not incur any asset-management fees. However, portfolios with ETF holdings can incur management costs on the underlying funds that range between 0.06% and 0.20%.

If you like the idea of a second daily trading window and a discount on interest rates when borrowing against the value of your portfolio, you can sign up for Plus account. Investing with more flexibility will cost you $125/year.

Customer Support

Should you have any burning questions or run into any problems with your accounts, the options for getting your answers include exploring the site’s comprehensive library of FAQs and requesting help from a customer service agent by submitting a contact form. Customer support representatives are available from 9:30 a.m. until 4 p.m. Eastern time.

The Bottom Line

M1 Finance may not offer mutual fund investing or tax-loss harvesting, and it is not the best choice for active traders. However, it’s still one of the best automated financial advisors we’ve come across. It charges no commissions, its fees are low, and the platform is incredibly easy to use.

Reasons to Open an Account:

  • Options to trade fractional shares
  • No asset-management fees
  • Flexible portfolio building
+ Show more
Read Full Review

Betterment Review

Quick Facts
4 stars Our Rating
Account Minimum:
$0 (Digital plan); $100,000 (Premium plan)
Management Fee:
0.25%-0.40% monthly
Expense Ratio:
0.06%-0.13% of ETFs annually
Portfolio Rebalancing:
Depends on the plan

Launched more than a decade ago, Betterment has set the standard for robo-advisory services, and it remains one of the industry’s top players. This automated investing platform offers tax-loss harvesting, portfolio rebalancing, robust financial planning tools, and the option to buy fractional shares so that the whole account balance can be invested.

Betterment’s platform is incredibly easy to use, and it even lets you sync external accounts to receive investment advice on them. Customers who opt for the Premium plan get access to a human financial planner and advisor too.

Account Types

Betterment offers individual and joint non-retirement accounts; traditional, rollover, SEP, and Roth IRA accounts; trusts; and cash accounts. The company also lets you link your external account for personal advisor services and guidance, but it won’t directly manage these accounts.

Investment Strategies

Like other robo-advisor firms, Betterment employs modern portfolio theory to create and manage clients’ investment portfolios. What makes this type of investment strategy unique is the emphasis on diversification and asset allocation based on predetermined risk levels.

Getting Started

Opening an investment account with Betterment is quick and easy. All you have to do is provide some basic information and fill out a questionnaire that determines your time horizons, risk tolerance, and investment goals. Based on that information, a personalized portfolio will be designed for you.

Depending on your risk-tolerance assessment, you’ll be offered a conservative portfolio (predominantly consisting of bonds) or an aggressive portfolio (fewer bonds, more stocks).

Portfolio Management

This automated financial advisor uses ETFs that represent about 12 asset classes for different investment goals and levels of risk tolerance. Another good thing about Betterment is that it lets its clients adjust the percentage of money invested in any particular exchange-traded fund if they want a bit more control over their investment portfolios.

In addition to the standard portfolio, there are a few more options to choose from: a "smart beta" portfolio that embraces systematic risks and seeks higher-than-average returns, a bond-heavy income portfolio, and a socially responsible portfolio.

Once your portfolio has been created, it will be fully managed by Betterment’s robo advising software. To keep each asset class in line with the target investment percentage, the company will provide periodic portfolio rebalancing. This online investment advisor will also reinvest dividends per your portfolio’s targets.

Additional Services

Tax-Loss Harvesting

Betterment performs tax-loss harvesting on all taxable accounts. In other words, it sells off losing asset positions near the end of the year, aiming to offset gains in other asset classes.

Financial Planning Tools

The company offers multiple tools and calculators that help clients choose the right accounts, set investment goals, and make smarter money decisions.

Human Financial Advisor

Unlike most of its competitors, Betterment provides the services of certified financial advisors for account holders with balances over $100,000. Offered as a part of the robo-advisor’s Premium plan, this service comes at a fraction of the 1% to 2% fee typically charged by traditional financial advising specialists.

Fees and Commissions

Betterment’s robo advising service comes in the form of two plans. If you opt for the Digital plan, you’ll be charged a 0.25% annual management fee in return for access to the company’s standard offering and the option to get in touch with an advisor via mobile messaging.

To apply for the Premium option, which comes with a 0.40% annual management fee, you’ll need to have a balance of at least $100,000. This plan comes with all the features included in the Digital option plus unlimited calls to Betterment’s team of certified financial planners.

ETF expense ratios range from 0.07% to 0.17%, assessed annually.

There are no additional account charges

Customer Support

Should you require assistance, you can get in touch with the robo adviser’s support team via phone or email from 9 a.m. to 6 p.m. Eastern time Monday through Friday. There’s also a live chat option (available on Saturdays and Sundays from 11 a.m. to 5 p.m. ET), but it’s offered only to existing Betterment clients.

The Bottom Line

A clear leader among robo financial advisors, Betterment offers two service plans: the Digital option for inexperienced investors and the Premium plan for those who prefer self-directed investing combined with professional management.

The company’s goal-oriented tools and multiple portfolio options appeal to both retirement and non-retirement investors, and the human advisor offering is very affordable compared with others.

Reasons to Open an Account:

  • Daily tax-loss harvesting
  • Low ETF expense ratios
  • 10 global asset classes used to build portfolios
+ Show more

Vanguard Digital Advisor Review

Quick Facts
4 stars Our Rating
Account Minimum:
$3,000
Management Fee:
0.15%
Expense Ratio:
0.05%
Portfolio Rebalancing:
Automatic

The Vanguard Group, Inc. is one of the oldest investment management companies on our list, founded way back in 1975. It provides some of the finest automated investment services in the world. Their services are a perfect match for those looking for retirement plans and matching portfolios, but also investors seeking low-cost robo-based advisors. 

Account Types

Vanguard works with joint and individual brokerage accounts, traditional and Roth IRA, and 401(k) accounts. These are all available to investors on a full-service record-keeping platform, provided they have the applicable defined contribution plans.

Investment Strategies

Getting Started

To sign up in the Vanguard Digital Advisor® app, you’ll need a brokerage account with at least $3,000 opened on the company’s platform. Vanguard allows you to add either a standard or IRA account.

The sum mentioned above is also the minimum initial investment you’ll need to make. Considering that several competitors do not require an initial deposit, and many of them have much lower deposit requirements, this is not the best option for cautious buyers. It’s clear that Vanguard doesn’t really cater to small-time investors.

When you fulfill all requirements and open a Vanguard account, you’ll fill out details regarding your age, risk tolerance, and several other factors. The company will invest your assets in a Vanguard portfolio consisting of four different exchange-traded funds. As one of the best robo investment advisors, Vanguard covers both stock and bond markets. We’ll talk a little more about these ETFs later on in the review.

Portfolio Management

Vanguard decided to offer only the robo-advisor in a simple digital package without adding optional services that might come in handy but are not essential for investors. Alternate robo-advisors provide advanced services such as tax-loss harvesting. Vanguard has instead opted for a more straightforward approach. 

Vanguard will create an essential index funds portfolio that will suit basic investment needs while incurring minimal expenses. The robo-advisor from Vanguard uses target-date retirement funds for automatic investments into your retirement plan. The investment allocation steadily changes as the investor approaches their target retirement date. The key benefit here is that Vanguard makes custom-allocated target-date retirement funds at a similar cost to what other companies would charge for standard target-date funds.

Fees and Commissions

One of the notable advantages of using Vanguard products is the affordable investment options that the company provides. The same goes for their app, the Vanguard Digital Advisor®. It offers a 0.20% all-in fee that covers everything you’d need to worry about, including the portfolio management and expense fees. As an example, for an investment portfolio of $20,000, investors would need to pay fees totaling only $40.

Additional Services

Low Investment Expense Ratio

Leading robo-advisors, including Vanguard, create personalized portfolios by looking at the investor’s current financial status, retirement goals, and other preferences. As we’ve already mentioned, Vanguard’s advisor uses four exchange-traded funds to build portfolios. These funds are called Total International Stock ETF (VXUS), Total Stock Market ETF(VTI), Total International Bond Market ETF (BNDX), and Total Bond Market ETF (BND). 

Vanguard exchange-traded funds have a mere 0.05% average investment expense ratio. Another bonus is that the app doesn’t charge annual, closing, transfer fees, onboarding, or setup fees. Overall low costs help investors to hold more onto the money for investments.

Personalized Retirement Plan

Here is something that most of the competitors don’t offer. Vanguard gives investors the ability to use an online retirement calculator to make personal retirement plans. The calculator needs a finished personal financial profile, along with household income and tax-filing status. If you want, you can connect outside accounts to it, too.

Another excellent feature of the Digital Advisor is the risk tolerance tool, which determines the investor’s willingness to accept the risks by facing them with several scenarios. During the final step, the investor fills in their retirement goals, keeping in mind retirement account contributions, planning horizon, Social Security benefits etc.

When the process is complete, Vanguard creates a portfolio that matches the investor’s goals and takes over managing that portfolio in the future. With Vanguard’s portfolio management solution, these are checked daily and rebalanced if an asset class differs by 5% or more from the target asset allocation. All of this is done without any assistance from real people advisors.

Payoff Calculator

Vanguard also offers a payoff calculator option that assists in paying off different types of debts. While the Vanguard abilities are focused on only a handful of financial aspects, all of them serve to improve or maintain the investors’ financial standing.

Customer Support

The most reliable robo investment apps offer excellent customer support, and the same goes for Vanguard’s Digital Advisor®. While it is not round-the-clock service, phone support agents are available from 8 AM to 8 PM EST Monday through Friday. You can also consult the site’s excellent knowledge base if no support agents are currently available.

The Bottom Line

Vanguard offers solid automated retirement investments with low fees. The only real snag is that you will have to invest $3,000 to get things started.

Reasons to Open an Account:

  • Low investment expense ratios and management fees
  • Vanguard’s vast ETFs and investing expertise access
  • Excellent for investors with a personalised retirement plan
+ Show more

Personal Capital Review

Quick Facts
3 stars Our Rating
Account Minimum:
$100,000
Management Fee:
0.49% to 0.89% annually
Expense Ratio:
0.08% on ETFs annually (average)
Portfolio Rebalancing:
Automatic

Launched in 2009, Personal Capital quickly became one of the market’s most popular financial products. Offering a service that combines cutting-edge technology with human financial advice, this hybrid digital asset management company now has over $12 billion in assets under management.

Account Types

Personal Capital supports individual and joint non-retirement investment accounts, traditional, Roth, rollover and SEP IRAs, trusts, and cash accounts. The company also offers advice on 401(k) and 529 plan allocations. However, it doesn’t offer direct management for these account types.

Investment Strategies

Getting Started

Personal Capital’s model of operation is built upon selling investment advisory services to a small percentage of customers while offering plenty of features for free. Still, we suggest you don’t waste your time exploring this option unless you are looking to put $100,000 or more in your investment portfolio. 

If you are part of Personal Capital’s target audience, you can rest assured that signing up with this robo-advisor is simple. All you have to do is provide the requested personal information and link one or more of your investment accounts with the platform.

Portfolio Management

Personal Capital bases its investment methodology on personalized and dynamic portfolio allocation, increasing diversification for better returns and risk minimization (smart weighing), automatic rebalancing, and tax optimization (tax-loss harvesting, tax allocation, and tax efficiency).

Fees and Commissions

While you can use Personal Capital’s financial management app for free, its wealth management services (investment management and other financial services provided by financial advisors) come with fees. The robo-advisor cost is determined by the size of your portfolio.

To get access to a financial advisor and the automated investing app, Personal Capital investors pay 0.89% per year on $1 million (or less) of assets under management. The fees drop as your portfolio grows. You’ll be charged 0.79% annually on the first $3 million, 0.69% on the next $2 million, 0.59% on another $5 million, and 0.49% if you invest more than $10 million.

Additional Services

Retirement Planner

Thanks to this feature, you can easily access your income and spending details to project the future value of your portfolio. Using this information, you’ll be able to see if you’re in the right shape for retirement.

Personal Capital also offers a Recession Simulator that you can use to get an idea of how your portfolio would have performed throughout past recessions. If you are concerned about the effects of a recession on your retirement plan, this is an excellent asset.

Cash Flow

Personal Capital’s cash flow feature works like a personal finance manager - not only does it aggregate your income and expenses automatically, but it also displays cash flow data in neatly organized charts.

Budgeting

There’s also a budgeting feature that groups all of your personal finance tools into a single app. You can use Personal Capital’s budgeting functions to set a monthly spending threshold and track your spending or see your savings and spending by merchant, date, and category.

Customer Support

To get the registration process started, you can reach customer service agents by phone. If you’re already a member, everything is handled directly through the financial advisor assigned to your account.

The Bottom Line

This hybrid robo-advisor appeals mostly to investors who can deposit a large enough sum to gain access to services that aren’t available with traditional financial advisors. However, Personal Capital is also an excellent choice for beginning investors, as they can use this robo-advisor’s financial planning tools at no cost to get valuable insights into their portfolios.

Reasons to Open an Account:

  • Access to financial advisors
  • Comprehensive investment management and retirement planning tools
  • Advanced tax optimization strategies
+ Show more
Read Full Review

Acorns Review

Quick Facts
3 stars Our Rating
Account Minimum:
$5
Management Fee:
$1-$5 monthly
Expense Ratio:
0.18% of ETFs annually (average)
Portfolio Rebalancing:
Automatic

Acorns seeks to modernize the practice of saving loose change for those who are struggling to put money aside. The company’s unique platform combines an automated savings tool with a robo-advisory model. The Acorns approach is simple - the platform rounds up your purchases on linked debit or credit cards and sweeps the change into an automated investment portfolio.

Account Types

Acorns is an excellent choice for hands-off investors, complete beginners, and non-savers. The company manages individual non-retirement accounts, traditional and Roth IRAs, and children’s accounts in accord with the Uniform Transfers to Minors Act and the Uniform Gifts to Minors Act.

Investment Strategies

Getting Started

Signing up with Acorns is incredibly easy. All you have to do is provide some personal information and choose a pricing plan. Once you have your account, you’ll be ready to download the Acorns robo investing app and manage your money whenever and wherever you are.

Portfolio Management

Before starting your investment journey, you’ll need to answer a few questions about your comfort level with risk, your investment goals, and the time you have to achieve these goals. After gathering this information, Acorns will suggest a diversified investment portfolio that fits your profile. While you are not obligated to accept the robo-advisor’s suggestion, note that there are only five portfolio options to choose from. 

Once you decide on the solution that best fits your needs, you’ll proceed by informing your robo broker about how much to invest. You can invest a lump sum of as little as $5, set up a recurring investment from your checking account, or combine the two approaches. From there, Acorns will take care of everything by reinvesting dividends and rebalancing your portfolio automatically.

Fees and Commissions

When it comes to pricing, Acorns doesn’t disappoint. There are three plans: Lite, Personal, and Family. Based on our fee comparison, this provider offers one of the great deals for unlimited investing, regardless of the plan you choose.

The Lite plan costs $1 per month and lets you invest spare change (the round-ups feature), earn bonus investments (the found money feature), and grow your knowledge using the platform's educational resources. 

For $3 per month, the Acorns Personal plan offers an all-in-one investment, retirement, and checking account along with a metal debit card, the ability to earn bonus investments, and access to comprehensive money advice.

Acorns also offers an option for those who’d like to start teaching their kids how to save money. The Family plan comes with a $5 monthly price tag and offers everything included in the lower two tiers while adding a feature called Early, a tax-advantaged investment account for children.

Additional Services

Round-Ups

The Acorns round-ups feature lets you link your credit and debit cards to the Acorns app, which rounds up each transaction to the nearest dollar and invests the change. The platform doesn’t make an investment each time you make a purchase. It waits until the spare change meets the $5 threshold, and then it withdraws the amount from your checking account and invests it automatically.

Found Money

Acorns has another unique feature: found money. Each time you make a purchase within Acorns’ network of more than 350 partners, including Airbnb, Expedia, Walmart, Nike, and Sephora, a little cashback will land in your investment account.

Customer Support

You can get in touch with the Acorns customer-service team via phone, email, and a contact form. Support representatives are available 24/7. They are quick to respond and very knowledgeable. You can also go through the site's comprehensive help page if you don’t feel like contacting a support representative.

The Bottom Line

Although Acorns isn’t free, it’s one of the more affordable options we’ve come across. Although the minimum investment is only $5, keep in mind that you run the risk of losing out to fees if you invest only tiny amounts. If you’re looking for a platform for automated investing for beginners but have a hard time setting aside money, Acorns is an excellent choice.

Reasons to Open an Account:

  • Spare change is invested automatically
  • Cash back at more than 350 retailers
  • Special features for kids’ accounts
+ Show more
Read Full Review

Wealthfront Review

Quick Facts
4 stars Our Rating
Account Minimum:
$500 (investment accounts); $1 (cash accounts)
Management Fee:
0.25% monthly
Expense Ratio:
0.06%-0.13% of ETFs annually
Portfolio Rebalancing:
Automatic

Launched in 2008, Wealthfront has quickly established itself as one of the market’s biggest robo-advisors. The company’s automated investment management and holistic financial advice appeal to both new and experienced investors.

Multiple tax-optimization strategies, low fees, and free financial planning guides make Wealthfront worthy of consideration, especially since you don’t need lots of experience or a huge amount of money to get started.

Account Types

Wealthfront offers traditional, Roth, SEP, and rollover IRAs; individual and joint non-retirement accounts; 529 college savings plans; trusts; and cash accounts.

Investment Strategies

Designed to meet the needs of both hands-off investors who want guidance from experts and hands-on investors who need help making smarter decisions, Wealthfront’s investment management is automated but also strategic and adjusted to each client’s individual risk levels.

Getting Started

When starting your robo portfolio management relationship with Wealthfront, you'll be asked to provide some basic information. The website will inquire after personal information, then ask about how much you have in savings and what your pre-tax income is.

Then you'll be given an opportunity to choose your investment goal - this can be anything from long-term investing to retirement or college savings. Lastly, to assess your risk tolerance, Wealthfront will require you to complete a short questionnaire.

Portfolio Management

After assessing your level of risk tolerance, Wealthfront's automated advisor builds a diversified portfolio with up to 11 asset classes (most portfolios include six to eight asset classes). Wealthfront’s investment options cover US and foreign stocks, dividend stocks, real estate, natural resources, emerging market bonds, US government bonds, corporate bonds, and Treasury inflation-protected securities.

The robo-advisor primarily uses low-cost exchange-traded funds, while investors with six-figure investments can opt for a stock portfolio.

From there, the process is completely automated. The software may rebalance your portfolio when money is deposited or withdrawn, dividends are reinvested, or market fluctuations make it necessary.

One of the best things about Wealthfront is that it uses threshold-based rebalancing. In other words, portfolios are rebalanced each time an asset class crosses a predetermined threshold, rather than on a monthly, quarterly, or yearly schedule.

There are no options to get in touch with a human advisor. Still, given that Wealthfront's software does a great job in creating and managing personalized portfolios, this isn't a major disadvantage.

Additional Services

Tax-Loss Harvesting

Wealthfront offers daily tax-loss harvesting on all taxable account types. New account holders who transfer in assets may find the company’s tax-minimized brokerage account transfer service useful. Accounts with balances of at least $100,000 are also eligible for stock-level tax-loss harvesting.

Goal Planning

What makes Wealthfront stand out from the competition in the context of additional advisor services is its robust set of financial planning tools. These tools come free of charge even if Wealthfront isn’t managing your assets. They can help you plan for life events such as buying a home, paying for college, retiring, and traveling.

Cash Account

In addition to multiple investment account options, Weatlhfront also offers cash accounts. Defined by the provider as a good place to earn interest on the funds you don’t want to invest, these FDIC-insured accounts come with an impressive 0.35% APY.

Lines of Credit

Clients with $25,000 or more in their accounts can borrow against their portfolios by opening a line of credit. Wealthfront lets you take out up to 30% of the value of your portfolio at rates that currently range from 3.9% to 5.15%. You won’t be asked to fill out an application, undergo a credit check, or pay any additional fees.

Fees and Commissions

Wealthfront has a competitive and easy-to-understand fee structure. Investment account holders are charged 0.25% of their portfolios every month.

Note that larger portfolios (over $100,000) may be invested in funds that incur slightly higher fees. Exchange-traded funds make up most of the portfolios Wealthfront manages. They come with expense ratios of 0.06%-0.13%.

To open an investment account with Wealthfront, you’ll be required to deposit a minimum of $500, while the minimum for a cash account is $1.

Automatic portfolio rebalancing is free on all accounts, as is linking your retirement and bank accounts to the company’s signature financial planning tool, Path.

Customer Support

Almost all interactions with Wealthfront’s customer service agents are conducted electronically. In addition to the comprehensive library of frequently asked questions and answers, Wealthfront’s account holders can also get in touch with the customer service team via phone and email. Support agents are available Monday through Friday from 10 a.m. to 8 p.m. Eastern time.

The Bottom Line

Wealthfront offers goal-based investing and helps its clients understand how the financial choices they make today may affect their futures.

This robo-advisor also provides tax-loss harvesting and automatic portfolio rebalancing. It supports a good selection of investment account types, and the fees on its ETFs are among the market’s lowest. The company doesn’t buy fractional shares, which may prevent it from investing your entire deposit; however, it offers a good deal on an FDIC-insured cash account.

Reasons to Open an Account:

  • Daily tax-loss harvesting
  • Low ETF expense ratios
  • Automatic portfolio rebalancing
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Sofi Automated Investing Review

Quick Facts
4 stars Our Rating
Account Minimum:
$0
Management Fee:
0%
Expense Ratio:
0.03% to 0.08% of ETFs annually
Portfolio Rebalancing:
Automatic

Well-known for its lending products, SoFi is a new kid on the block when it comes to robo advising. This doesn’t mean that SoFi Automated Investing can’t compete with the industry’s top players. The company doesn’t charge administrative or advisory fees, and it provides access to low-cost ETFs.

To top it off, SoFi’s service includes unlimited access to a team of CFPs along with complimentary career coaching.

Account Types

SoFi’s account offerings are somewhat limited compared to those offered by competitors. Options include retirement accounts such as traditional, Roth, SEP, and rollover IRAs, along with individual and joint non-retirement accounts.

Investment Strategies

SoFi Automated Investing offers an excellent platform for cost-conscious investors who are just starting out and thus favor a hands-off approach. Like other robo-advisors, the company offers competitively priced diversified portfolios.

Getting Started

Setting up an account with SoFi is quick and easy. While new clients are asked to provide basic personal and asset information, there are no inquiries related to your market experience or risk tolerance.

The automated investing platform picks one of the model portfolios based on your investment objectives. However, prospective clients can override the robo-advisor’s suggestion and choose their own risk profile. Getting in touch with a human advisor is also an option at this point.

Portfolio Management

Based on investment objectives and risk tolerance, SoFi’s clients can choose from a selection of 10 model portfolios. Each option comes with a diversified selection of low-cost ETFs, which mostly consist of international stocks, US stocks, and real estate, high-yield, and Treasury bonds.

Much like most other online investment advisors, SoFi Automated Investing provides automatic portfolio rebalancing. Each time money enters or leaves your investment account, the robo-advisor checks to see if your portfolio has drifted away from predetermined target allocations. If it has, it rebalances your portfolio automatically.

Additional Services

Financial Planning

What makes SoFi really stand out from the competition is that in addition to automated investment tools, all of its clients have unlimited access to the company’s team of certified financial advisors at no extra charge.

Special Bonuses

SoFi offers special bonuses to clients. These include such things as access to members-only social events and complimentary career coaching.

As this company’s client, you can also get reduced rates on student loans and mortgages that are provided by SoFi. To become eligible for these special perks, all you have to do is invest at least $20 each month.

Fees and Commissions

As far as costs go, SoFi is one of the most investor-friendly providers on our list. Unlike its rivals, the company charges no monthly management fees. Additionally, there are no administrative charges for transferring money or closing accounts. Portfolio expense ratios are also very low, ranging from 0.03% to 0.08% of assets under management.

Customer Support

Inexperienced investors - or those simply looking to access certified professionals - will be happy to hear that there are multiple ways to get in touch with SoFi’s financial advisors. You can schedule a phone or video call between the hours of 5 a.m. and 5 p.m. Eastern time,

Monday through Thursday, and from 5 a.m. until 4 p.m. on Fridays. 
Should you require assistance with technical issues, this automated advisor’s customer service agents will be there to help you from 4 a.m. until 9 p.m. Pacific time Monday through Thursday and from 4 a.m. until 5 p.m. on Fridays. Support channels include phone, email, and Twitter.

The Bottom Line

A relative newcomer to the robo-advisor industry, SoFi Automated Investing stands out from the crowd for its incredibly investor-friendly service.

To help you reach your financial objectives, the automated advisor offers robust goal-based planning tools and automatic portfolio rebalancing - everything you need, except perhaps tax-loss harvesting. In addition to automated investment services, SoFi’s clients get access to a financial advisor, discounts on other financial products offered by the company, and fee-free career advice.

Reasons to Open an Account:

  • Wide range of low-cost investment options
  • Access to a team of certified financial planners
  • Free account management
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Read Full Review

Ellevest Review

Quick Facts
5 stars Our Rating
Account Minimum:
$0
Management Fee:
$1 – $9 per month
Expense Ratio:
0.05%-0.10% of ETFs annually (core portfolios); 0.13%-0.19% of ETFs annually (impact portfolios)
Portfolio Rebalancing:
Automatic

Launched in 2017, Ellevest is designed to meet the needs of female investors. Although it was created to help women overcome gender wage gaps, this robo investment advisor accepts clients of any gender identity and expression.

Ellevest uses a proprietary algorithm to identify financial targets and determine the best achievement strategies for each client’s specific needs. Unlike most of its competitors, this stock investing platform uses gender-specific salary curves and longevity data to forecast financial goals and provide personalized recommendations.

Account Types

Ellevest offers several types of investment accounts. Clients who choose the Essential plan can open only individual taxable accounts, while those who go for the Plus or Executive plans can choose among traditional, SEP, and Roth IRAs. Ellevest doesn’t offer joint taxable accounts.

Investment Strategies

Getting Started

Starting your robo investing journey with Ellevest is relatively easy. In addition to providing your basic personal data, you'll be required to choose among the three subscription plans fairly early in the registration process. At this point, you may still be unsure about what you want from a robo trading platform, so you might find this requirement premature. 

From there, you’ll be required to link an eligible bank account. Then the platform will ask you a few questions related to your household income. You’ll also need to enter estimates of your balances in checking and savings accounts, 401(k)s, IRAs, and taxable accounts to help Ellevest get a complete picture of your assets.

After that, you can choose investment goals such as retirement, starting your own business, or a down payment on a house. Ellevest lets you invest in multiple goals at once. The platform will suggest totals for your goals and allow you to review them and adjust your risk level. 

Once you approve the goals for your account, you’ll be able to see the specific ETFs and mutual funds Ellevest recommends before making a decision. Ellevest portfolios consist of a mix of ETFs that cover more than 20 asset classes. For its standard portfolios, the company chooses from 20 ETFs, while impact portfolios draw from 27 ETFs and mutual funds.

Portfolio Management

Unlike most other robo-advisors for stock market investing, Ellevest focuses on creating specific target allocations for each portfolio. In other words, the platform selects more aggressive funds for long-term investment goals and more conservative options for the short term.

As one of the excellent robo stock advisors, Ellevest gives clients a certain level of control over how aggressively their money is invested and allows them to adjust their exposure up or down (between 5% or 10%, depending on the investment goal).

Whenever the portfolio drifts away from its target allocation, the platform makes sure to rebalance the investments automatically.

Additional Services

Financial Planning

While everyone can purchase CFP services or coaching sessions through Ellevest’s website, members get access to professional financial help at a lower price. You can get a one-time session on budgeting, unlimited access to a certified financial planner, and everything in between with a 20%, 30%, or 50% discount based on your membership plan.

Educational Resources

Ellevest offers all members free digital workshops led by its team of coaches. Investors receive personalized progress reports with useful advice on how to keep their goals on track plus access to a huge library of videos, articles, and how-to guides.

Fees and Commissions

As of June 2020, Ellevest stopped charging a percentage of assets under management to new investors. Instead, the company introduced Money Memberships, a tiered pricing structure with flat monthly fees.

The company’s fees start at just $1 per month if you sign up for the Ellevest Essential plan, which lets you set a single goal. To open any type of IRA, you must go with Ellevest Plus ($5 per month). If you’d like to pursue up to six investment goals, the Executive plan ($9 per month) is your only option.  

Customer Support

You can get in touch with customer service via email or by phone. While the hours for phone support are limited (9 a.m. to 6 p.m. Eastern time), customer service agents are knowledgeable and quick to respond. You can also request help by sending a text message or by getting in touch with the agents via Facebook Messenger.

The Bottom Line

Even though Ellevest welcomes all investors, it is an especially good choice for women with multiple goals in mind. The fact that its algorithm takes the salary curve and lifespan of each client’s gender profile into account is refreshing, and so is the pricing policy. Beginning investors will appreciate the comprehensive library of educational resources and access to a team of CFPs.

Reasons to Open an Account:

  • Goal-focused approach to investing
  • Portfolio mix that takes women’s needs into account
  • Access to financial coaches and CFPs
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Read Full Review

Blooom Review

Quick Facts
4 stars Our Rating
Account Minimum:
$0
Management Fee:
$45-$250 annually
Expense Ratio:
Not stated
Portfolio Rebalancing:
Automatic

Launched in 2013, Blooom quickly became known as one of the excellent solutions for retirement accounts. The Kansas-based company stands out from the competition thanks to its focus on managing employer-sponsored retirement plans and individual retirement accounts.

While most robo-advisors also manage IRAs, Blooom is practically the only one that provides investment management for 401(k)s. Blooom found a way to fill an overlooked niche and now has more than $3 billion in assets under management.

Account Types

Blooom is a great choice for an IRA or an employer-sponsored plan. The list of supported accounts includes traditional IRAs, Roth IRAs, SIMPLE IRAs, SEP IRAs, spousal IRAs, and nondeductible IRAs along with 401(k)s, 403(b)s, 457s, 401(a)s, and thrift savings plans.

Investment Strategies

Getting Started

The sign-up process is simple. Start by linking Blooom with your retirement account. It doesn’t matter whether that’s an IRA or an employer-sponsored plan.

Next, you’ll be required to answer a few simple questions about yourself. As soon as you verify your account, Blooom will analyze your situation and make investment recommendations. You’ll then be ready to start your automated investing journey.

Unlike most of its competitors, this robo-advisor only manages investment accounts and doesn't take control of them, so you won’t need your employer's approval to sign up for the service.

Portfolio Management

Blooom will create your portfolio based on your current age, projected retirement age, and risk tolerance profile. Both the retirement age and the risk tolerance level will be determined when you apply, but you can make adjustments to your portfolio at a later stage.

Blooom employs multiple investment strategies. Individual stock exposure isn’t a part of this robo-advisor’s approach, and such investment positions may be excluded from its management or sold for reallocation.

Additionally, the platform may sell your current investments and use the cash to buy the recommended positions (this is true only for IRAs).

Blooom makes sure to rebalance your portfolio regularly and minimize hidden investment fees while providing financial advice and alerting you in case of suspicious activity.

Fees and Commissions

When you compare robo-advisors, you’ll find that Blooom’s pricing policy is simple and unique. Instead of a percentage fee on the balance of your account, the company charges a single annual fee that’s determined by the pricing tier you choose.

Blooom offers three service plans. Priced at $45 per year, the Essentials plan allows you to personalize your portfolio and minimize hidden investment fees. The Standard plan costs $120 per year. It offers withdrawal alerts, automatic optimization of your accounts, and access to a financial advisor.

Blooom also offers an option that includes unlimited accounts. The Unlimited plan comes with a $250 annual fee and offers all of the benefits of the lower two tiers along with priority access to advisors.

Before you commit to a fee, Blooom will perform a free analysis of your plan. Also, keep in mind that you’ll be asked to put a credit card on file as management service fees can’t be deducted from your investment balance.

Additional Services

Automatic Portfolio Optimization

One of the best things about investing in an automated portfolio is periodic auto-optimization. This feature helps keep your investments on track as your allocation changes with the market. Blooom makes sure to rebalance your portfolio every 95 days if necessary.

Account Protection

Blooom doesn’t take custody of your IRA or your retirement plan. Instead, the funds remain with a custodian under appropriate financial protection. Considering that Blooom is a fiduciary, the company is required to act in clients’ best interest.

Customer Service

You can get in touch with Blooom’s support representatives via email or live chat. Working hours are from 9 a.m. until 4 p.m. Central time on workdays. Should you encounter issues or problems, you can rest assured that the customer service will review your request for assistance promptly.

The Bottom Line

If you’re on the hunt for the best solution to manage your employer-sponsored retirement plan or IRA, Blooom is an excellent choice.

Since the company’s robo-investing features include personalized portfolio management and the minimization of investment fees, you’ll be able to get on with your life knowing that you’ve put your retirement plan in good hands.

Reasons to Open an Account:

  • IRA and 401(k) management
  • No investment minimums
  • Access to financial advisors
+ Show more
Read Full Review

Interactive Advisors Review

Quick Facts
4.5 stars Our Rating
Account Minimum:
$100-$50,000
Management Fee:
0.08%-1.5% annually
Expense Ratio:
Not stated
Portfolio Rebalancing:
Automatic

Offered by Interactive Brokers, a popular broker for advanced traders, Interactive Advisors was created with a mission: to make investing easy, transparent, and efficient. The software has secured a spot on our list thanks to a broad range of customizable portfolio options, low fees, and access to highly trained investment professionals.

Account Types

The Interactive Advisors platform supports a wide variety of broker account types such as individual and joint taxable accounts, trusts, and different IRA structures, including traditional, Roth, and rollover. Regardless of the type, each account works as a cash account, which means it can use the proceeds from stock sales instantly rather than waiting for a two-day settlement to pass.

Investment Strategies

Getting Started

Widely regarded as suitable for both retirees and younger investors, Interactive Advisors lets you sign up with a fast and simple application process. If you already have an account with Interactive Brokers, all you need to do is complete a short questionnaire.

However, if it’s your first time doing business with this robo-advisor or its parent company, you’ll need to provide personal data, choose an account type, and confirm that you are a US resident. 

From there, you’ll be able to set your goals and get an overview of the performance data on a wide range of available portfolios.

Portfolio Management

Even if you are an experienced trader, you’ll still benefit from Interactive Advisors’ ability to create low-cost diversified portfolios customized for your needs and the risk levels you’re comfortable with.

Seeking to combine assets that perform well in different economic conditions, this robo-advisor makes sure to allocate investors’ capital to a bond component, an equity component, and an inflation-hedging component. Given that this strategy delivers solid diversification, you can count on risk reduction and good robo investing returns.

In addition to portfolio personalization and smart diversification, Interactive Advisors also offers quarterly automatic rebalancing and complete transparency.

Note that the clients have the option to start trading their own assets (stocks, bonds, options, and ETFs) by upgrading to an Interactive Brokers Universal Account at any time.

Fees and Commissions

Given the wide range of fees, the best way to get a cost estimate is by using the Interactive Advisors cost breakdown tool. Keep in mind that the least expensive portfolios come with 0.08% annual management charges, while the most expensive options carry a 1.5% fee. You won’t be charged anything on uninvested cash.

Additional Services

Cash Account

You can keep your uninvested funds in a cash account. However, interest rates are very low. Also, there are quite a few restrictions that keep small balances from earning anything at all.

Human Advisors

One of the best things about Interactive Advisors platform is that it offers unlimited phone access to highly trained investment professionals.

Educational Resources

A comprehensive educational center is another reason this company’s services deserve a spot among the top individual account robo-advisors. There are plenty of in-depth articles, videos, and how-to guides on the website.

Customer Support

Interactive Advisors offers multiple ways to get in touch with its customer service team. Phone support is available from 8 a.m. to 8 p.m. Eastern time Monday through Friday and from 1 p.m. until 7 p.m. on Sundays. Online chat and email support are available around the clock on business days - for both current and prospective clients.

The Bottom Line

Interactive Advisors’ set of portfolios is among the most complex we’ve encountered, which makes it an excellent robo-advisor for hands-on investors. In other words, if you are among trading veterans who understand how index funds are constructed but are still looking for a bit of a hands-off approach, Interactive Advisors offers a sophisticated way to introduce some automation to your investment strategies.

Reasons to Open an Account:

  • Wide range of portfolios
  • Option to upgrade to an Interactive Brokers Universal Account
  • Plenty of educational resources
+ Show more
FAQ
Are robo-advisors a good idea? +

Given their ease of use and low fees, robo-advisors are an excellent option for entry-level investors, especially when compared with traditional brokerage firms. These online investment management companies provide a good starting point for working toward your financial goals and building wealth, especially if you’re starting with less than $25,000 to invest.

Do robo-advisors beat the market? +

Most robo-advisors employ an index fund investing strategy, which means they can closely match market performance - but this doesn’t necessarily mean that they can beat it. No matter how sophisticated your robo-advisor’s algorithm may be, chances are that it won't be able to beat the stock market consistently.

Can you trust robo-advisors? +

Absolutely. Using robo-advisors instead of working with a traditional broker is completely safe, and it comes with many advantages. Some of the most important benefits of "autopilot" investing services include low asset-management and trading fees, low minimum balances, Nobel Prize-winning investment models, access to human financial advisors, and market expansion for younger investors.

How do I choose a robo-advisor? +

Start by defining your goals. Make sure you understand fees, commissions, and investment minimums. Check each platform’s ease of use. Review the support team’s credentials. Compare the offerings of multiple providers. After doing in-depth research, we’ve concluded that Wealthfront, Betterment, SoFi, Ellevest, Blooom, Acorns, Personal Capital, Interactive Investors, and M1 Finance are among the leading in the industry.

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