The best robo advisor for your investment goals depends on your priorities, but the best robo advisor overall is Betterment for its low 0.25% annual fee, $10 minimum, and automated tax-loss harvesting. Whether you prioritize low fees, a low minimum balance, or specific features like tax-loss harvesting, this comparison of the 15 best robo advisor platforms will help you find the right fit for automated investing.
What are robo advisors and how do they work?
Robo advisors are automated investment platforms that provide digital financial management services online. They collect financial information from clients, including individual investment goals, and use algorithms and mathematical rules to build and manage portfolios. Most robo advisors determine your risk tolerance through surveys, using your financial information and preferences to select an appropriate portfolio. The program then automatically invests client assets in the best portfolios based on this risk level, handling tasks like rebalancing and tax-loss harvesting without human intervention.
Benefits of using a robo advisor
Robo advisors leverage technology to reduce the need for human intervention, which keeps fees low compared to traditional advisors. Human advisors typically charge more than 1% of assets under management, while the best robo advisors charge between 0.25% and 0.50%. Many platforms require low or no minimum balances, making investing accessible with just a few hundred dollars. Robo advisors are available 24/7 with an internet connection, offer automatic rebalancing to keep portfolios on track, and provide tax-loss harvesting to reduce tax bills. They also include educational tools for beginners and remove emotional decision-making from the investment process.
15 best robo advisor platforms compared
The following list compares the best robo advisor platforms based on fees, minimum balance requirements, and standout features. Each platform offers a unique combination of services, from automated tax-loss harvesting to hybrid human advisor access.
1. Betterment
Betterment's Digital Plan charges an annual fee of 0.25% of assets under management, or $5 per month if the household balance is below $24,000 and recurring deposits are less than $200/month, requiring only $10 to begin investing. Betterment includes automated tax-loss harvesting for all taxable accounts and offers a Premium Plan with unlimited Certified Financial Planner (CFP) access for a 0.65% annual fee and a $100,000 minimum. The platform uses smart financial tools to build portfolios correlated to your financial profile and investment objectives, automatically rebalancing as needed.
2. Wealthfront
Wealthfront charges a 0.25% annual management fee for automated investing accounts, requires a $500 minimum, and provides automated tax-loss harvesting and goal-based planning tools. The platform helps you set and track financial goals while managing your portfolio automatically.
3. SoFi automated investing
SoFi Automated Investing charges a 0.25% annual advisory fee, has a $50 minimum, and provides access to financial planners (complimentary 30-minute session for regular members, unlimited for SoFi Plus members). The platform also offers career coaching events and integrates with SoFi Money, a checking and savings hybrid account.
4. M1 Finance
M1 Finance charges a $3 monthly platform fee for accounts with less than $10,000 in assets (waived if total M1 assets are $10,000+ or with an active M1 Personal Loan) and requires a $500 minimum for investment accounts. The platform offers pie-based portfolio customization with fractional shares, allowing you to create personal investment ratios or choose from pre-made portfolios.
5. Axos Invest managed portfolios
Axos Invest Managed Portfolios charges a 0.24% annual advisory fee and requires a $500 minimum for managed portfolios, with an additional $40 minimum annual account fee if quarterly model fees are low. This platform provides automated portfolio management at a competitive fee rate.
6. Personal Capital
Personal Capital is a hybrid robo-advisor that combines human financial planners with automated apps for analyzing investment mixes. It supports diversified portfolios across US stocks, international stocks, and bonds, and offers tax-loss harvesting and automatic rebalancing. The platform removes emotional decision-making by automatically balancing your portfolio based on your risk preferences.
7. Acorns Spend
Acorns Spend uses round-up investing with a linked debit card: purchases are rounded up to the next dollar, and the difference is automatically invested. The platform offers five basic portfolio templates, uses dollar-cost averaging, and automatically rebalances your account. It is ideal for passive beginners who want minimal decision-making.
8. Vanguard Personal Advisor Services
Vanguard Personal Advisor Services combines robo advising with access to a team of experts, offering low-cost ETFs and mutual funds. The service requires a $50,000 minimum for advisory services and has a strong long-term track record. While not beginner-friendly due to higher minimums, it provides some of the lowest fee investment products on the market.
9. Interactive Advisors
Interactive Advisors offers portfolio options with individual stocks and fractional shares, requiring a $1,000 minimum. The platform provides margin lending, allowing customers to borrow against their accounts at low interest rates, and a Portfolio Analyst that consolidates your financial accounts in one place for a clear picture of your investments.
10. Ellevest
Ellevest is designed for women, taking gender-based wage gap considerations into account with a higher recommended savings rate. Portfolios comprise ETFs managed by Vanguard, and the platform offers coaching services for salary negotiations and career transitions. Annual fees range from 0.25% to 0.50%, and both women and men can use the service.
11. Ally Invest Forex
Ally Invest Forex is a self-directed platform with a $100 minimum and no account management fees. It features a customizable live invest dashboard and a probability calculator for options traders. The platform monitors and automatically rebalances portfolios while providing educational resources for beginners.
12. Future Advisor
Future Advisor focuses on investment management, retirement planning, and college savings, with a $5,000 minimum and a 0.50% management fee. The platform offers tax-loss harvesting and works with existing accounts at other firms, so clients do not need to move their funds.
13. Charles Schwab Intelligent Portfolios
Charles Schwab Intelligent Portfolios requires a $5,000 minimum and provides personal consultant access, ETF trading, research tools, and educational materials for beginners. The platform offers a one-stop-shop experience with easy navigation and access to global exchanges.
14. Wealthsimple
Wealthsimple offers multiple account types including personal, corporate, and savings accounts, with automatic ETF purchases and rebalancing. The platform allocates portfolios based on risk tolerance, leaning more on stock mutual funds for aggressive plans and bond ETFs for conservative plans.
15. Blooom
Blooom focuses on employer-sponsored retirement plans, with under 5-minute setup and no minimum balance. The platform provides fact-based portfolio recommendations, automatically manages and rebalances your portfolio, and alerts you to hidden fees, hacking attempts, and market changes.
SigFig
SigFig offers low-cost portfolio management with external account reconciliation, tax-efficient strategies including tax-loss harvesting, and automatic rebalancing. The platform provides access to investment experts for difficult decisions and displays all investment information on a dashboard for easy monitoring.
Fidelity Investments
Fidelity Investments has no minimum to open an account, with $10 to start investing. The platform uses mutual fund-based portfolios, monitored by a combination of human resources and robo advisors, and offers a wide selection of financial planning tools. Rebalancing is handled by investment managers as needed.
Important considerations before using a robo advisor
Robo advisors are simply financial tools that cannot make up for the lack of investment knowledge. Most assume users have an understanding of basic investment concepts and their financial circumstances. It is important to have well-defined financial goals. Some experts advise against complete reliance on a robo advisor, especially during extreme market changes, which requires personal research and advisory services.
Final thoughts on choosing the best robo advisor
The best robo advisor depends on your individual needs for fees, minimums, and features. Robo advisors lower barriers to entry for financial markets, making it easy for beginners with a few hundred dollars to invest. They eliminate human intervention to reduce fees and handle tasks like portfolio balancing and tax savings. However, you need to understand how the platform works before trading and determine what to invest in through research and expert assistance. Robo advisors are highly useful tools, but they are not solely responsible for your investing future.
