The Best Robo Advisor Comparison of 2019
In the last decade, technology has transformed every aspect of our lives. It was just a matter of time for the automation to enter the trading world.
Today, building a portfolio does not require filling extensive documents, contacting brokers via the phone, hefty fees or excessive account minimums – it is just a matter of choice and is available to everyone.
And the reason for that is called “robo-advisors” - the new disruptive technology that has dramatically transformed the trading world.
In the following review, you will get to know all the available solutions on the market and find out which is the perfect choice for you to start investing.
From entirely automated robo-advisors, through commission-free services, to companies combining technology and personal approach, the robo-advising landscape today has something to offer for all types of investors.
In the Best Robo Advisor Comparison, we will reveal one of the most important wallet hacks for investors and deep-dive in the pros and cons of each platform. Also, we will find out which are the most widely-renowned solutions on the market. So, here are…
The U.S. market is stuffed with robo-advising solutions which is often confusing to individuals who are willing to make their first steps in the investing world.
Although most automated investment management companies operate in quite a similar way, it is often important to do thorough initial research and find a service provider who is entirely dedicated to helping you achieve your goals.
When trying to find the best solution on the market, it is crucial to consider 3 crucial factors - fee structure, investment strategy and suitability to your personal goals.
Of course, you should also take into account important details such as history, assets under management, ease-of-use of the platform, etc.
However, if you manage to consider all of the abovementioned points, you will surely find a suitable solution to help you achieve your financial plan. In order give you a hand with that, here is a thorough review of the most popular and proven robo-advisors on the market:
M1 Finance Review
Best for: personal investment management
M1 Finance is not only a robo-advisor. In fact, it is a platform that combines the best of the robo-advisory and the brokerage worlds.
Unlike most of its competitors, M1 Finance provides its clients with the option to choose from a DIY or a robo-directed portfolio.
This makes it the best solution for personal investment management and a universal choice for beginners with no experience and individuals who want more freedom when constructing their portfolios.
The platform’s investment methodology is based on pies which can be aligned to the individual goals of each investor.
M1 Finance’s clients invest in stocks and ETFs free of charge.
Apart from that, the platform provides advanced investment features such as automatic rebalancing, recurring investments, dividend reinvestment, cash control, etc.
With M1 Finance, investors can take advantage of IRAs, joint, retirement and trust accounts.
Get the complete picture about M1 Finance from our in-depth M1 Finance review.
Best for: investors who want a flexible all-around solution
Betterment goes toe-to-toe with Wealthfront as both of them are the leading robo-advising service providers on the market. However, when compared with Wealthfront, Betterment has one main advantage – it does not have an account minimum requirement.
This is one of the reasons why the company has managed to become the biggest player in the industry with more than $14 billion in assets-under-management. Currently, the robo-advisor is renowned as the best for investors who want a flexible and functional solution.
Betterment supports personal taxable accounts, joint accounts, all types of IRAs and trust accounts. The app charges its users a 0.25% management fee which covers all transactions, transfers and trading costs, as well as automatic portfolio rebalancing.
However, for those who are more serious about investing and want to gain access to personal advice, Betterment also offers the chance to take advantage of phone consultations with their team of CFP® professionals and licensed financial experts for a fee of just 0.40% per year.
In terms of performance, Betterment claims that their approach to long-term investing helps their users earn 2.66% more on average each year when compared to a regular investor.
If you want to find out more about Betterment, check our complete review where we answer all questions including is Betterment safe?
Best for: entirely-free robo-directed investing
WiseBanyan claims on its website that it is the “world’s first free financial advisor” which says it all very clearly. The company has a minimum account balance requirement of just $1, while at the same time does not charge any management, trading or rebalancing fees.
This makes it the best entirely-free robo-directed investment service on the market in terms of value-for-money.
However, for those who prefer a more self-directed investment process, WiseBanyan offers premium packages with features such as tax protection (WiseHarvesting and IRAutomation), selective trading, quick deposits, overdraft protection, as well as the opportunity to build a custom portfolio (Portfolio Plus).
With its Teamwork package feature, the robo-advisor also targets couples who want to save together.
Although the platform invests predominantly in ETFs with low expense ratios, it manages to build portfolios with a very broad exposure to a wide variety of instruments, such as U.S., foreign and emerging markets stocks, corporate, government bonds, REITs, etc.
WiseBanyan supports taxable accounts as well as all types of IRAs.
Find out more about what makes WiseBanyan one of the best solutions on the market from our detailed WiseBanyan review.
Best for: fully-functional and automated passive investing
Wealthfront is one of the first companies that come to mind when thinking about robo-advisors as it is among the pioneers in the niche.
Today, the company offers a complete automated investment service, alongside with features like rebalancing (threshold-based), tax-loss harvesting, free financial tools, etc.
This makes it the best for fully-functional and automated passive investing for all types of investor profiles.
With Wealthfront, investors get maximum exposure to a variety of ETFs among various asset classes - from the U.S., foreign, emerging markets and dividend-growth stocks, through U.S. government, emerging markets, corporate and municipal bonds, to inflation-protecting assets like real estate, natural trusts and TIPS.
Wealthfront’s users can also take advantage of various account types, such as 529 college savings, 401(k) rollovers, and all types of IRAs (Roth, Traditional, SEP).
The low management fee (0.25%), alongside with the minimum account requirement of $500 makes it suitable even for beginners with limited capital.
More information about Wealthfront and the benefits of using one of the leaders in the robo-advisory field is available in this review: Is Wealthfront worth it?
Personal Capital Wealth Management Review
Best for: high-net-worth individuals
Personal Capital Wealth Management’s service is a mix of robo- and traditional financial advisory. By combining the best of both worlds, Personal Capital offers a hybrid model based on algorithms and human advisors, targeted at $100 000+ individuals.
This means it is more of a niche solution, rather than a universal one and makes it suitable only for a specific group of investors (best for high-net-worth individuals).
Apart from the high account balance requirement, Personal Capital Wealth Management charges a fee of 0.89% for portfolios worth up to $1 million.
Personal Capital Wealth Management points out that its investing methodology usually outperforms the S&P 500 with 1.5% per year on average while maintaining lower volatility levels.
The advisor invests in a wide variety of ETFs and asset classes such as U.S. and foreign stocks and bonds, cash, REITs and commodities.
The company offers joint and taxable investment accounts, trusts, all types of IRAs, 529 college saving and 401(k) plans (advice-only).
However, apart from the high-end investing service, Personal Capital is widely renowned for its financial planning tools, such as spending tracker, investment checkup, 401k analyzer, etc., all of which are available for free.
To find out more about Personal Capital, make sure to check our in-depth Personal Capital Wealth Management Review
SoFi Wealth Management
Best for: entirely free active or passive investing solution
Next on the list comes SoFi Wealth Management. The service is very flexible as it allows investors to go either way – DIY or robo-assisted investing.
SoFi Wealth Management ranks as the best for entirely free active and passive investing. Yes, that is right – the company does not charge any transaction or management fees.
In order to start with SoFi’s automated investing, you are required to fund your account with a minimum of $100.
After that, depending on your risk tolerance, you can take advantage of 5 automated trading strategies. You can also build a separate portfolio for each individual goal, as well as change it on the go.
And the best thing of all is the fact that you can consult a professional financial consultant through email, phone or chat at no costs!
SoFi builds its clients’ portfolios from a wide variety of ETFs with exposure to U.S. and foreign stocks, real estate, high-yield and Treasury bonds and many others. In fact, the diversity of the offered instruments is one of the best in the sector.
The only downside of SoFi Wealth Management is the lack of 529 saving and 401(k) plans.
Best for: socially-responsible investing
Wealthsimple is often put in the same bracket as Betterment and Wealthfront. Although the robo-advisor offers a similar quality of its service and $0 account balance, the truth is that it is way more expensive with management fees of 0.5% for accounts up to $99 999.
A possible reason for the pretty higher fees is the fact that Wealthsimple allows all customers, regardless of their account balance, the opportunity to get a personal consultation from one of the company’s certified financial planners.
When it comes to the investing part, the thing that makes Wealthsimple different is the fact that it grants you access to sector-specific and even exotic ETFs, covering sectors and causes like clean energy, ecology, gender diversity, etc. which makes it the best for socially-responsible investing.
Wealthsimple is also a perfect solution for those who are adhering to halal investing. The robo-advisor offers more than 50 stocks of companies that are a suitable choice for Shariah-adherent portfolios.
Best for: female investors
Although Ellevest offers a standard robo-advising service, its target market is female investors.
You may wonder how investing is different for males and females, but Ellevest points out that when it structures a portfolio it takes into account females’ generally lower incomes, longer life expectancy, earning curves, etc.
Apart from that, all accounts with more than $50 000 (Premium package) get personal career advice and access to certified financial planners. All this makes Ellevest the best for female investors.
Ellevest does not have any minimum account balance requirement. However, it has a fixed management fee of 0.25% for the standard Digital package and 0.5% for Ellevest Premium.
The best thing about Ellevest is the fact that it covers 21 asset classes (ETFs and mutual funds) which is the best in the whole category.
Another interesting feature of the robo-advisor is the Ellevest Impact Portfolios. They are designed to help clients reach their goals by investing up to 50% of their portfolios’ value in companies, focused on changing the landscape by putting women in charge.
The robo-advisor supports personal taxable accounts and IRAs.
Schwab Intelligent Portfolios
Best for: investors who seek diversification
Schwab Intelligent Portfolios covers both sides of Charles Schwab’s business by offering automated investment management services and personal financial advising.
In order to take advantage of the service, one should start with at least $5 000. On the bright side, however, is the fact that Schwab’s robo-advising services do not charge any management fees.
Schwab Intelligent Portfolios’ clients’ money is invested in more than 50 ETFs in 20 asset classes (U.S. large- and small-cap stocks, emerging markets and international stocks, precious metals, REITs, high-yield and Treasury bonds).
This makes them the best choice for investors who seek wide diversification of their portfolios. Another advantage of the robo-advisor is its flexibility in terms of accounts supported.
Schwab Intelligent Portfolios support taxable and retirement accounts, as well as provide the chance to roll over a 401(k) or IRA.
However, one of the main downsides of the robo-advisor is the fact that it allocates anywhere from 6% to 30% of its users’ portfolios in cash which may not be considered appropriate by non-conservative investors.
Best for: low-cost investments with human oversight
Fidelity Go, the robo-advising division of Fidelity Investments, brings a new pricing structure to the table as it charges its clients a fixed fee with all fund management costs included.
For a 0.35% advisory fee, clients’ money is invested in index funds, monitored by human advisors. Considering also the fact that there is no account minimum, Fidelity Go can be regarded as the best for low-cost investments with human oversight.
Fidelity Go’s clients’ portfolios primarily hold Fidelity Flex mutual funds covering domestic and foreign stocks, bonds and short-term investments.
The robo-advisor’s users are not required to pay additional fees for the rebalancing of their portfolios. As opposed to most of its competitors, instead of automatically, Fidelity Go rebalances its clients’ portfolios manually, through its investment management team.
Fidelity Go supports individual and joint taxable accounts and IRAs. The service’s main downsides are the lack of retirement accounts and tax-loss harvesting features.
Best for: workplace retirement 401(k) plans
The truth is that, unless you are one of the first in the business or a well-funded company, it is hard to stand out among the rest in the robo-advisory niche.
The only way to do that is to narrow your focus. And that is exactly what Bloom does. The robo-advisor focuses entirely on attracting retirement assets.
Apart from 401(k)s, Bloom manages 403(b), 457s and 401(a) plans. There is no account minimum, but at the same time, there is a fixed monthly management fee of $10.
Bloom’s clients are allowed to adjust the asset allocation, recommended by the robo-advisor, thus aim for bigger exposure to stocks or bonds.
Simply put, Bloom is not your typical robo-advisor. Proactive investors and users who want access to more flexible investment solutions should look elsewhere. However, when it comes to long-term saving, Bloom is best for workplace retirement 401(k) plans.
Vanguard Personal Advisor Service
Best for: comprehensive financial planning
Apart from Fidelity Go, Vanguard Personal Advisor Service is another suitable choice for those who want to taste the robo-advising waters with a solution from an established broker.
As a leader in low-cost mutual funds, Vanguard has plenty of expertise on how to reduce the fees that its clients pay for its services. And it is no different with the Personal Advisor Service.
The management fee starts at 0.3% of the AUM and the higher the balance is, the lower the fee gets. Clients also get access to personal financial planners, available 12 hours per day, throughout the business days.
However, Vanguard Personal Advisor Service has one main downside and it is the account minimum requirement of $50 000, which is one of the highest in the field.
This automatically prices out beginner investors and individuals with less capital, placing Vanguard Personal Advisor Service in the same bracket as Personal Capital.
Vanguard’s robo-advisory service supports non-retirement accounts, IRAs and Trusts.
The Best Robo Advisors In a nutshell
The following table covers the management fees of all robo-advisors, included in the review, as well as their assets-under-management (AUM), to help you get the bigger picture of where each company stands on the market.
Robo Advisor Comparison
SoFi Wealth Management
Schwab Intelligent Portfolios
$10 per month
Vanguard Personal Advisor Service
Best Robo Advisor Comparison - Review Summary
In recent years, robo-advisory services have made the investing process easier and more accessible, no matter how much one can invest or what goals does he have.
Thanks to the extreme competition in the niche, today investors are the ones who benefit the most. Nowadays, one can start investing with as little as $1 and pursue his long-term goals in a flexible and convenient way.
So, if you are on the hunt for finding the most suitable robo-advisory service, make sure to check our in-depth reviews of the different solutions, available on the market.
The good thing is that there are plenty of robo-advisory options that can help you achieve your long-term goals.
All you have to do is to start investing.
And as Warren Buffett says, the best time to do it is yesterday.
The second best is today.
See also: The Best Investment Apps Revealed