Barely in existence for 10 years, robo-advisors have taken the investment universe by storm. Dozens of different robo-advisors are now handling investment management for millions of investors across the country. We put together our list of the top 10 robo-advisors, to help you choose one that might work for you.

But before you jump in, we’ve put together a shortlist of the top 3 robo-advisors – and we’ve let you know who they’re perfect for.

Try our Best Robo Advisor Questionnaire

If you don’t want to go through the hassle of comparing the features and specifications of each and every robo advisor to find the perfect one that suits your needs, try our questionnaire. It’ll take about 30 seconds, and we’ll recommend the perfect robo advisor for you.

Top 3 Shortlist of the Best Robo-Advisors

Our Top 3 Robo AdvisorsBest For
BettermentNew investors with a low starting balance
Personal CapitalExperienced investors looking to take the next step
M1 FinanceInvestors looking for a robo advisor, but with a human touch

Full List of the Top 10 Robo-Advisors

Betterment1. Betterment

Betterment is the largest independent robo-advisor, and the one that’s been setting the standard for all others. Though they have a bottom line fee of 0.15%, it’s available only on accounts over $2 million. So expect to pay 0.25%, but that’s on the lower end of the robo-advisor fee range. They’ve recently been upgrading live contact with advisors, moving the platform away from a purely automated one.

  • Fees: Digital: 0.15 to 0.25%; Premium: 0.30% to 0.40%.
  • Minimum initial investment: Digital: $0; Premium: $100,000.
  • Available accounts: Taxable individual & joint; traditional, Roth, rollover, & SEP IRAs; trusts & non-profits.
  • Portfolio rebalancing: Yes.
  • Access to human advisors: Yes + premium packages available.
  • Investments included: Low cost ETFs in US & foreign stocks and bonds.
  • Tax-loss harvesting: Yes.

Personal Capital2. Personal Capital Wealth Management

Personal Capital Wealth Management operates as a robo-advisor, but it might be better to say it’s a low cost, automated investment management service. They offer the services you’ll typically find with traditional human driven investment management services, but at much lower rates. Though their rates are higher than other robo-advisors, the service level is a cut higher, and worth the extra fee.

They also offer a free personal finance software that also provides some investment guidance, so there’s really something on this platform for everyone.

  • Fees: 0.49% to 0.89% – the higher fee applies to accounts under $1 million.
  • Minimum initial investment: $100,000.
  • Available accounts: Taxable individual & joint; traditional, Roth, rollover IRAs; trusts.
  • Portfolio rebalancing: Yes.
  • Access to human advisors: Yes, including a personal financial advisor.
  • Investments included: Low cost ETFs invested in US and foreign stocks and bonds as well as alternatives.
  • Tax-loss harvesting: Yes.

M1 Finance3. M1 Finance

M1 Finance is something of a hybrid between do-it-yourself investing and a robo-advisor. The DIY part is that you choose your own investments. You do this by creating mini-portfolios, called “Pies”. Each can be dedicated to any investment theme of your choosing.

But the robo-advisor part comes in where M1 manages the portfolios you create. It’s perfect for the self-directed investor who doesn’t want to handle the day-to-day management of their portfolios.

  • Fees: $0. Some miscellaneous fees – read more here.
  • Minimum initial investment: $0. There is a $100 minimum account size for taxable accounts and a $500 minimum for retirement accounts.
  • Available accounts: Taxable individual & joint; traditional, Roth, rollover, & SEP IRAs; trusts.
  • Portfolio rebalancing: Yes.
  • Access to human advisors: No.
  • Investments included: Create your own investment portfolios, using ETFs and stocks.
  • Tax-loss harvesting: No.

Wealthfront4. Wealthfront

Wealthfront has been aggressively innovative in recent years. Not only do they offer funds that invest directly in stocks for larger investors, but they’ve also added a portfolio line of credit to the mix. It’s for accounts with over $100,000, but it comes with very low interest rates. Meanwhile, this robo-advisor may take the prize as the best at investment tax minimization.

  • Fees: 0.25%.
  • Minimum initial investment: $500.
  • Available accounts: Taxable individual & joint; traditional, Roth, rollover, & SEP IRAs; 529, trusts & non-profits.
  • Portfolio rebalancing: Yes.
  • Access to human advisors: No.
  • Investments included: Low cost ETFs in US & foreign stocks and bonds; real estate investment trust (REIT); natural resources; mostly individual stocks on larger portfolios.
  • Tax-loss harvesting: Yes.

Charles Schwab5. Schwab Intelligent Portfolios

Schwab Intelligent Portfolios is the robo-advisor for Charles Schwab. Its two leading features are that there is no fee to use the service, and they add REITs to the mix of stocks and bonds. One consistent criticism against this robo-advisor, however, is that it holds a fairly large cash position in most accounts, creating “cash drag” (uninvested funds).

  • Fees: $0.
  • Minimum initial investment: $5,000.
  • Available accounts: Taxable individual & joint; traditional, Roth, rollover, SIMPLE & SEP IRAs; custodial, trusts.
  • Portfolio rebalancing: Yes.
  • Access to human advisors: No.
  • Investments included: Low cost ETFs invested in US and foreign stocks and bonds, US and foreign REITs.
  • Tax-loss harvesting: Yes.

Validea6. Validea Legends

Validea Legends is a different kind of robo-advisor in that they don’t simply attempt to match the performance of the general markets, but to outperform them. They do this by investing in stocks based on stock picks by well-known Wall Street “gurus”, like Peter Lynch and Warren Buffett. But they also use what they call “equity rotation” to reduce stock exposure in bear markets. The attempt is to outperform the market on the way up, and on the way down.

They also offer two different basic accounts, Legends Advisor, which is primarily a growth fund, and Legends Income, which is also focused on growth, but primarily on income.

  • Fees: 0.25% for the Advisor plan; 0.50% for the Income plan.
  • Minimum initial investment: $25,000.
  • Available accounts: Taxable individual and joint; traditional, Roth, rollover and SEP IRAs; trusts and other accounts.
  • Portfolio rebalancing: Yes.
  • Access to human advisors: Unlimited access to investment consultants.
  • Investments included: Low cost ETFs Invested in US in foreign stocks and bonds, shares of Berkshire Hathaway A; gold, commodities, REITs and private equity.
  • Tax-loss harvesting: No.

Merrill Edge7. Merrill Edge Guided Investing (MEGI)

Merrill Edge Guided Investing is the rob-advisor for Merrill Edge, and it’s another platform that attempts to outperform the market, rather than just matching it. They use a mix of proprietary software with human guided investment strategies. But they also employ what they refer to as tactical strategic shifts, in which management will re-adjust your portfolio based on shifts in the financial markets.

  • Fees: 0.45%.
  • Minimum initial investment: $5,000.
  • Available accounts: Taxable individual and joint; traditional, Roth, rollover, SIMPLE and SEP IRAs; Solo 401(k), custodial and 529 plans.
  • Portfolio rebalancing: Yes.
  • Access to human advisors: No.
  • Investments included: Low cost ETFs invested in US and foreign stocks and bonds as well as alternatives.
  • Tax-loss harvesting: No.

Wealthsimple8. Wealthsimple

Wealthsimple works like most other robo-advisors, but it also offers an option for socially responsible investing, as well as a Halal Portfolio, that invests consistent with Islamic principles (no debt securities since interest is prohibited under Islamic laws). The fee is a bit higher than other robo-advisors, but the investing is also more specialized.

  • Fees: 0.50%, with the first $5,000 managed free.
  • Minimum initial investment: $0.
  • Available accounts: Taxable individual and joint; traditional, Roth, rollover, and SEP IRAs; trusts.
  • Portfolio rebalancing: Yes.
  • Access to human advisors: Yes, including consultation with a Certified Financial Planner.
  • Investments included: Low cost ETFs invested in US and foreign stocks and bonds.
  • Tax-loss harvesting: Yes.

Ellevest9. Ellevest

Ellevest is a robo-advisor designed for women. In fact, their motto is Invest Like a Woman. It’s hoped that the platform will help women achieve their financial goals. They differ in their investment strategy in that they recognize poor market scenarios, as well as the real world impact of taxes, fees, and inflation.

They also use a goals-based strategy, in which you can establish goals for retirement, emergencies, or even the down payment on a home.

  • Fees: Digital: 0.25%; Premium 0.50%.
  • Minimum initial investment: $0.
  • Available accounts: Taxable accounts, plus traditional and Roth IRAs.
  • Portfolio rebalancing: Yes.
  • Access to human advisors: Yes.
  • Investments included: Low cost ETFs invested in US and foreign stocks and bonds, and US and foreign REITs.
  • Tax-loss harvesting: No.

Motif10. Motif

Motif might be the most unique robo-advisor of all. They enable you to create your own mini portfolios, called motifs. Each motif is theme-based. For example, you might create one based on renewable energy, and another based on clean waste disposal. Each motif consists of 30 securities, which can include ETFs or individual stocks.

  • Fees:$9.95 to buy or sell a motif; $4.95 to trade a stock or ETF within a motif, but they do offer flat monthly fees of $4.95 to $19.95.
  • Minimum initial investment: $250.
  • Available accounts: Taxable accounts, plus traditional and Roth IRAs.
  • Portfolio rebalancing: No.
  • Access to human advisors: No.
  • Investments included: Stocks and ETFs invested in US and foreign stocks and bonds, as well as real estate and commodities stocks.
  • Tax-loss harvesting: No.

What is a Robo-advisor, and Who Are they Good For?

Robo-advisors are automated investment platforms that handle all aspects of investment management for you. That includes creating a portfolio, rebalancing it periodically to maintain the target allocations, and reinvesting dividends.

They start by asking you a list of questions, generally between six and 10, that are designed to determine your investment goals, time horizon, and investment risk tolerance. Based on your answers, your portfolio can be conservative, aggressive, or somewhere in between.

Robo-advisors are managed based on Modern Portfolio Theory (MPT), which is an investment strategy that emphasizes asset allocation over individual security selection.

Overall, robo-advisors offer investors – particularly new and small investors – professional investment management at a very low cost.

What to Look for in a Robo-advisor

Since most robo-advisors operate in similar fashion, deciding which one to go with really comes down to the details.

The first consideration is the investment methodology. They all invest in a mix of stocks and bonds, but you might prefer a robo-advisor that seeks to outperform the market, invests in specialized areas, like socially responsible investing, or enables you to have some control over the investments in your portfolio.

Other factors include fees, minimum initial investment, the types of accounts available, access to human advisors, or the availability of tax loss harvesting (to minimize your tax liability in taxable accounts).

You may also be very interested in the investment composition a platform offers. For example, you may prefer to have alternative investments, like real estate, gold, or other commodities included. And there are robo-advisors that provide those alternatives.

Robo-advisor vs. Traditional Investment Advisor

Robo-advisors do essentially what traditional investment advisors do, but with several significant differences:

  • Lower fees. Traditional investment advisors charge between 1% and 3% of your portfolio each year. Robo-advisors typically charge between 0.25% and 0.50%.
  • Portfolio size. Traditional investment advisors typically require a minimum investment of $100,000, and many want $500,000 or more. You can usually start a robo-advisor account with anywhere from zero to $5,000.
  • Financial advice. With traditional investment managers, one or more advisors are appointed to manage your portfolio. With robo-advisors, portfolio management is automated. Robo-advisors are adding additional human contact, but it’s still generally less than what you will get from traditional investment managers.

Traditional investment managers are primarily for high net worth individuals, who are looking for close personal investment attention. However, since the two services do essentially the same job, some high net worth individuals are now switching over to robo-advisors. After all, just 1% per year variance in fees can make a major difference in the size of your portfolio in 20 or 30 years.

Robo-advisor vs. DIY Investing

Robo-advisors and do-it-yourself (DIY) investing are direct opposites. As a DIY investor, your preference is to choose and manage your own investments. With a robo-advisor, you’re looking for all your investment activities to be managed by the platform.

And while it does stack up as an either-or-choice, you could also mix the two. For example, you can maintain a DIY portfolio, while also having a portion of your portfolio managed by a robo-advisor. It can give you the best of both worlds.

Final Thoughts on the Top 10 Robo-Advisors

In ranking these robo-advisors from one to 10, we’re simply expressing our opinion of which we think are the best for the majority of investors. But robo-advisors now come in so many different flavors that you can choose the one that best matches your investment personality.

For example, you can choose a totally automated robo-adviser, or one that offers a generous amount of human assistance. Or you can choose a platform that invests in areas of the economy that are near and dear to your heart. At least one robo-advisor on this list will work perfectly for you.

LEAVE A REPLY

Please enter your comment!
Please enter your name here