Find a robo advisor that matches your investing style.
Watching the robo advisor industry grow is like seeing evolution in action. What started as simple tools for beginners to start investing have evolved into hybrid digital advice tools for all levels of investors, says Igor Jonjic, senior product manager at Fiserv. Today, robo advisors come in as many flavors as Ben & Jerry's ice cream. Having options is great, but only if you know how to sort through them to find the best one for you. To help you find the right robo advisor, here are the best robo advisors of 2019 for every type of investor.
Fidelity Go: Best overall robo advisor.
Fidelity Go was awarded the Best Overall Robo for the second time in a row by Backend Benchmarking in their latest 2019 Robo Rankings. The ranking evaluates robo advisors based on quantitative performance and cost plus qualitative metrics such as their services, platform and features. Fidelity Go excelled both quantitatively with near-top portfolio performance and low cost (thanks in large part to the zero expense ratios and commissions on the funds it uses), and qualitatively for its strong digital planning platform. Where the robo advisor falls short is in access to financial advisors. For that, you'd need their hybrid Personalized Planning and Advice model, which costs 0.5% per year and has a $25,000 account minimum. Fidelity Go also lacks the tax loss harvesting feature offered by many other robos, but it does provide free rebalancing and withdrawals.
Management fee: 0.35% (0.5% for the hybrid model)
Account minimum: None ($25,000 for the hybrid model)
Betterment: Best for beginning investors.
With no account minimum, Betterment is a great robo advisor to start investing -- and Backend Benchmarking agrees. The Robo Rankings awarded Betterment the Best Robo for First-Time Investors this year thanks to its low cost, no minimum and straight forward goal-based investing. Like the robo advisor industry, Betterment has evolved from a purely robo tool providing investors a quick way to get started to the hybrid robo-and-human advisor model it is today, Jonjic says. And just as Betterment has grown over time, investors can grow with it. The beginner level, called Betterment Digital, gets you started on goal-based investing and provides unlimited access to experts via chat. Or, its Premium level matches you with a certified financial planner for a one-on-one advisor relationship.
Management fee: 0.25% (digital) or 0.4% (premium)
Account minimum: None (digital) or $100,000 (premium)
Vanguard Personal Advisor Services: Best for access to a human financial advisor.
Vanguard's robo advisor took the silver medal overall in the latest Robo Rankings report, thanks in part to its top-notch access to human financial advisors and financial planning tools. The mutual fund behemoth's robo component, called Vanguard Personal Advisor Services with Ongoing Guidance, gives investors an alternative to the traditional "come to my office every six months to review your portfolio" advisor relationship, Jonjic says. Instead, you can call, email or video chat. The advisor will put together a plan based on your situation. Said plan will generally be Vanguard funds-based and not include individual securities. Also of note: while the robo advisor has a $50,000 minimum, to receive an assigned advisor, you need to invest more than $500,000; anything below that gets you a team of advisors.
Management fee: 0.3% - 0.05% based on account size
Account minimum: $50,000
Wealthfront: Best for financial planning tools.
Wealthfront has branded its passive, rules-based investment strategy on Burton Malkiel's (who happens to be Wealthfront's chief investment officer) famous line that a blindfolded monkey could pick stocks as well as the experts. Instead of monkeys, Wealthfront uses a team of Ph.D.s (which may not be a fair comparison) and software programs to find investment strategies. Portfolios consist mainly of low-cost, passive exchange-traded funds. Since they believe in passive, software-based investing, you don't get access to financial advisors for human guidance. But you do get a wealth (pun intended) of financial planning resources to help you get your finances in order yourself. The platform's complex planning tools, which model six different goal-based scenarios, from retirement to income windfalls to taking a sabbatical to travel, is why they were awarded Best Robo for Digital Financial Planning from Backend Benchmarking. Since some of these goals require short-term funds, the platform also offers an impressive high-interest savings account, currently earning 2.07% APY.
Management fee: 0.25%
Account minimum: $500
WiseBanyan: Best for low fees.
WiseBanyan was recently rebranded as Axos Invest but still advertises itself as "the world's first free financial advisor," a title earned by its zero management, trading or rebalancing fees. And to those who believe the axiom "you get what you pay for," the Robo Report says, "false." In addition to being among the lowest cost robo advisors, the report found Axos Invest had the second best two-year and three-year performance behind Fidelity Go and SigFig, respectively. The Report attributed this outperformance over other low cost robo advisors to the fact that Axos Invest does not keep a high cash balance in their portfolios.
Management fee: None
Account minimum: $1
Blooom: Best for 401(k) investors.
If you have a 401(k), you need to know about Blooom, says Shannah Compton Game, a Los Angeles-based certified financial planner and host of the "Millennial Money Podcast." For $10 per month, Blooom "helps you sort through the laundry list of investment choices in your 401(k) and create a portfolio that meets your risk tolerance and investing needs," she says. "Their strength is in optimizing your portfolio and helping you get rid of any pesky hidden fees that are lurking in your 401(k)." They'll also help with other employer-sponsored plans like your 403(b), 401a or 457 but nothing outside an employer's sphere. Feeling unsure? Take Blooom for a trial run with their free five-minute 401(k) analysis.
Management fee: $10 per month
Account minimum: None
SoFi Automated Investing: Best for all your financial needs.
Known primarily for student loan debt consolidation, SoFi has expanded its offering into investment advice with SoFi Invest. The investment app lets you trade on your own, or you can use its automated investing feature to take the legwork out of investing. SoFi's robo advisor uses goals-based investing to craft a portfolio from its suite of low-costs ETFs. The robo's $1 account minimum, zero management fees, and free access to human financial advisors and career counseling earned it the runner up spot for Best Robo for First-Time Investors in the latest Robo Rankings report. The company also offers free checking and a high-interest savings account, complete with budget tracking to help you save more so you can invest more.
Management fee: None
Account minimum: $1
EarthFolio: Best for socially responsible investing.
While many robo advisors have socially responsible investing options, if you want SRI and nothing but SRI, the best robo advisor to use is EarthFolio. It uses 10 environmental, social and governance criteria to screen for the best-in-class sustainable funds. After a quick questionnaire about your timeline, risk tolerance and goals, EarthFolio will recommend a portfolio of sustainable funds to match your financial needs. It'll also give you the 15-year historical performance of their recommendation and a head-to-head comparison of it to your current portfolio. The downside to EarthFolio is it has a steeper account minimum and advisory fee (common with SRI investments) than other robo advisors on this list.
Management fee: 0.5%
Minimum investment: $25,000
Acorns: Best for help saving.
If your biggest hurdle to investing is saving, Acorns is the best robo advisor for you. This micro-investing app automatically invests your spare change by rounding up purchases to the nearest dollar and investing the difference. No need to make deposits or set up recurring contributions (although that's an option). Answer a few questions to identify which of their five ETF portfolios is right for you, link your credit or debit card or PayPal account and the rest, as they say, is automatic.
Management fee: $1, $2 or $3 per month depending on plan
Account minimum: None
M1 Finance: Best for DIY investors.
If you'd rather build your own portfolio or prefer individual stocks over funds, you want M1 Finance. It combines some of the best robo advisor features with the ability to self-direct investments. You can build your own portfolio, or your "pie" as they call it, using any stock or ETF traded on a major exchange. Simply set the percentage of your portfolio each investment should represent and M1 Finance will allocate your contributions accordingly so you're always balanced. And by using fractional shares, you're always fully invested "down to the penny." If you decide building your own portfolio is too much work after all, M1 offers fully built pies, too.
Management fee: None
Minimum investment: $100 ($500 for retirement accounts)
Ellevest: Best for women investors.
Women have a different approach to investing, according to Ellevest's co-founder Sallie Krawcheck, which is why she and the Ellevest team created a robo advisor geared toward women and their specific needs. You get personalized ETF portfolios targeted toward your goals that are automatically rebalanced with tax-minimizing strategies and no penalties for withdrawals. Ellevest Premium also gets you one-on-one access to CFPs and executive coaches for salary negotiation and career advice for double the management fee. They also offer a private wealth management service for investors with more than $1 million to invest, which was recognized by the Robo Rankings for its complex financial planning capabilities. Fees for that are determined by just how much you've got.
Management fee: 0.25% (digital) or 0.5% (premium)
Account minimum: None ($50,000 for Ellevest Premium)
The best robo advisors of 2019.
-- Fidelity Go: Best overall robo advisor.
-- Betterment: Best for beginning investors.
-- Vanguard Personal Advisor Services: Best for access to a financial advsior.
-- Wealthfront: Best for financial planning tools.
-- WiseBanyan: Best for low fees.
-- Blooom: Best for 401(k) investors.
-- SoFi Invest: Best for all your financial needs.
-- EarthFolio: Best for socially responsible investing.
-- Acorns: Best to start saving.
-- M1 Finance: Best for DIY investors.
-- Ellevest: Best for women investors.
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