It used to be so expensive to get your investment portfolio managed. Now, thanks to robo-advisors, anyone with a few dollars can start investing.
Just like human advisors, robo-advisors can help you minimize your risk and manage your tax losses while maximizing your rewards. Robo-advisors use computer algorithms to manage your portfolio and ensure your money is invested efficiently.
Each year, several new robo-advisors join the market. I recommend all 15 of the following platforms for a variety of reasons.
15 Best Robo-Advisors of 2021
Here are the 15 best robo advisors of 2021:
|M1 Finance||No Management Fee|
|Ally Invest||Syncing Banking and Investing|
|Vanguard Digital Advisor||Full Service Robo-Advisor|
|Personal Capital||Investing Portfolio Recommendations|
|SoFi Invest||Automated Investing|
|Wealthfront||Financial Planning Resources|
|FutureAdvisor||Free Investing Resources|
|Charles Schwab||Automatic Tax-Loss Harvesting|
|Fidelity Go||Free Automated Rebalancing|
|TD Ameritrade||Low Expense Ratios|
M1 Finance can offer investors the best of both worlds: a full-service robo-advisor with no management fees to invest your money or auto-balance your portfolio.
You don’t even need a minimum balance to open an account, though M1 will wait until you have $100 in your account before beginning to invest. *note: accounts with less than $20 for 90 days are subject to fees.
Even though the service is free, M1 Finance is not a discount or light-weight option for robo-advising. You’ll have access to plenty of features and a user-friendly interface.
You can set up a retirement or taxable account, invest in individual stocks or ETF shares, and even invest in fractional shares to keep more of your money in the market.
M1 does lack a few peripheral features some users may like such as access to a human financial advisor and the ability to import data from your other accounts which would place your investments in context.
Customer support is available only by phone or email and only during business hours (Central time).
- Fees: None unless you use M1 Borrow (a lending service) or let your account fall below $20.
- Minimum: $0 to get started, $100 before investing starts
- Benefits: More than 80 existing investment strategies to use; plus you can customize your own strategy.
Free automated investing. Create your own portfolio with any stock and/or ETF, for free. Users can also get access to lines of credit. Try M1Finance Today!
Betterment was one of the first robo-advisors, and it remains one of the largest robos measured by assets under management. This investing platform is incredibly intuitive and designed to make investing simple and fluid.
I invested with Betterment for over a year. While I decided to make the switch to Vanguard (see Betterment vs. Vanguard), Betterment is a great option for both beginning and experienced investors who want a best in class robo-advisor.
Betterment’s features include 7-day customer service, personalized, goal-based retirement planning; and the premium service gives access to a financial advisor. Betterment also offers a high interest savings account called Betterment Everyday™ and a new checking account.
- Fees: 0.25% for the digital service, 0.40% for premium service
- Minimum: $0
- Benefits: Betterment portfolios automatically rebalance to prevent top-heavy investments, have tax-loss harvesting in non-retirement accounts, account syncing, and fractional share buying to increase investment load with available capital.
No matter your investing experience, Betterment offers a robust and easy to use platform to help you grow your money.
Ally Bank has launched one of the top robos within its new Ally Invest platform. If you can make the minimum deposit of $100, you can invest without paying any advisory fees.
I also recommend Ally Bank’s high yield savings account which syncs up perfectly with Ally Invest’s robo, “Managed Portfolios” as opposed to Self-Directed Trading.
This connection between banking and investing lets Ally offer a unique feature: 30% of your portfolio will be allocated in cash which creates a nice buffer for new investors who haven’t developed a high risk tolerance yet.
Since Ally’s pays an interest rate that far surpasses the national average for savings accounts, this cash component won’t be sitting idle.
When it comes to investment management, this robo gives you four options: socially responsible investing, tax-optimized investing, a strategy to enhance your income, and a core plan you can customize.
I’ve been an Ally Bank customer for almost 10 years. They have great customer service. They’ve never tried to up-sell me on anything.
- Fees: 0%
- Benefits: Integrates with Ally Bank and their high yield savings account brokerage accounts, can combine with a managed (robo) account, self-directed trading account with no-commission trades, and a bank account.
- Read our full Ally Bank Review
Ally is an excellent choice for an active trader who is interested in volume discounts and some of the industry’s lowest fees, such as $0 trade commissions.
Wealthsimple started in Canada and currently has over $5 billion Canadian Dollars under management; however, their investment platform is now available in the United States, as well as other countries.
One of the biggest benefits of working with Wealthsimple is its customizable portfolios, custom portfolio reviews, and the opportunity to create a values-based portfolio.
While their fees are higher than Betterment and Wealthfront, they don’t have a minimum investment and also offer more opportunities for socially responsible and halal investing.
- Fees: 0.50% for accounts
- Minimum: $0
- Benefits: Wealthsimple save offers high 0.90% yield (CA only)
Blooom is not your traditional robo-advisor, but we’ve included this platform because it’s a valuable way to optimize your 401(k) plan.
A vast majority of Americans in any financial situation have their retirement savings in either a 401(k) or 403(b) plan.
Blooom offers a free analysis tool, access to financial advisors, and strategies to help you get the highest return out of your employer-sponsored retirement plan.
- Fees: $10 / mo
- Minimum: $0
- Benefit: Strong asset allocation tools, syncs with 401k plans.
- Get Your FREE Investment Analysis Today
- Read our full Blooom Review
Vanguard Digital Advisor
Vanguard Digital Advisor® is an all-online robo-advisor from Vanguard, one of the most respected financial institutions in the world with $7.1 trillion assets under management as of the end of 2020.
Unlike some of the other products on this list, with their tool, you can play around with difference scenarios — changing things like when you want to retire, how much you want to save, and your future income or expenses. Once your goal is set, Digital Advisor automatically invests your money for you, allocating in a similar but more personalized way as target-date funds.
Digital Advisor also helps you consider your full financial situation by offering tools like debt payoff calculator, which informs your payoff plan using the “avalanche” method (debt with the highest interest rates first).
It’s important to note that, compared to Vanguard Personal Advisor Services® and some of the other robos on the list, Digital Advisor does not give you access to a human financial advisor. The trade-off, however, is incredibly low fees.
- Fees: approximately 0.15% for advice
- Account Minimum:$3,000
- Benefit: Very broadly diversified Vanguard ETFs® with low fees that help you save for retirement in an automatic, hands-free portfolio
- Read our full Vanguard Digital Advisor Services Review
- Invest with Vanguard Digital Advisor
Personal Capital created the best free money tool in the United States, and I’ve been using it for the past six years to track my net-worth, expenses, and investment portfolio.
While the tool is completely free to use and includes investing portfolio recommendations, Personal Capital is also a robo-advisor, which combines algorithmic trading with the support of a financial advisor.
While their fees are a bit higher than Betterment, Personal Capital has more advanced tax optimization features, which, which might be worth it to you.
You can’t open an account until you have $100,000 to invest.
- Fees: 0.49% – 0.89% depending on account balance
- Minimum: $100,000
- Benefits: App support, Advanced Tax optimization
If you can spare some pocket change, you can start investing with Acorns. Acorns is a micro-investing app that rounds up your purchases to the nearest dollar and then invests the change. For example, if you buy a cup of coffee for $2.75 then the app would invest $0.25.
Acorns does this every time you buy anything, so you’re able to invest money without having to think about it. I’ve been using Acorns for a couple of years and the money definitely adds up quickly.
It’s different than a traditional robo-advisor because it’s less geared toward big financial goals like saving for retirement. Instead, it focuses on smaller targets like building an emergency fund or taking a trip.
It’s a great first step if you haven’t started saving or investing, or if you are investing and just to add a little bit more money to your investments without having to think about it. The basic plan costs $1 a month. The premium plan adds a lot of features and costs $3 a month.
- Fees: $1-$3 per month
- Minimum: $5
- Benefit: Students receive free accounts until the age of 24
You probably know SoFi is a student loan refinance company. This lender has expanded its offerings to include SoFi Invest, where you can buy individual stocks or invest through an Automated Investing robo-advisor.
SoFi Automated Investing gives you all the features of a more expensive robo advisor with no minimum investment.
These features include goal planning tools (where you can set life goals and get recommendations for how to best save for them), automatic portfolio rebalancing (so you can make sure you stock/bond asset allocation is maintained), as well as help building a diversified portfolio (to help minimize your investing risk while maximizing your returns).
You’ll also get great customer support with access to certified financial planners if needed.
- Fees: 0%
- Minimum: $100
- Benefit: Receive bonuses on SoFi products, list of low-cost investments to choose from, free management, and automatic rebalancing
- Read our full SoFi Review
Wealthfront was one of the original robo-advisors, and it offers very similar features, including tax-loss harvesting, low expense ratios on exchange-traded funds, and more.
While Wealthfront is definitely one of the best robo advisors and gives you access to financial advisors and individual help.
- Fees: 0.25% asset management fee
- Minimum: $500
- Benefit: Tax-loss harvesting that can add 2% to annual investment performance, good interest rates on FDIC insured cash accounts, and automatic rebalancing.
Ellevest is a robo with financial advisor support, designed around the unique needs of women. It’s goal-focused investing strategies factor in gender-specific considerations like pay and life expectancy.
There are three levels of Ellevest: the base plan (digital), premium plan, and private wealth management, each with their own fee level and services.
At the digital level you get access to a simple online investing tool with an annual fee of 0.25%. The premium plan includes career coaching and financial planning with an annual fee of 0.50%. There’s also a private wealth level, where you get a dedicated team if you invest $1 million or more.
Get your first month free using our link below and code: NICEONE
- Fees: 0.25% – 0.50% depending on service level
- Minimum: $0
- Benefit: Automatic rebalancing and tax minimization, premium services allow certified financial planners and executive coaching.
Future Advisor is an online financial advisor whose tagline is “Your investment accounts work better when they work together.”
FutureAdvisor has a unique robo-advisor model. You could link all your investment accounts to this platform which acts as a fiduciary, advising you on all your accounts. (You can keep all of your money invested in your current accounts.)
For example, just like Blooom, FutureAdvisor can help you optimize your 401(k) account, in addition to all of your other investment accounts.
If you want to keep your money invested with your current financial institutions but want a holistic view of your personal finance life, you’ll like FutureAdvisor.
- Fees: 0.50%
- Minimum: $500
- Benefit: Well priced and easy entry to robo advising with long term financial planning.
Charles Schwab Intelligent Portfolios
Charles Schwab, the world’s largest brokerage firm, has entered the world of robo-advising with its simple but robost product that resembles Wealthfront and Betterment, but charges no fees.
So why isn’t Schwab higher on this list? Because you’d need to invest a minimum of $5,000 to use this service.
But if you have $5K to get started, Intelligent Portfolios seamlessly integrates with other Charles Schwab products and is available in range of different account types, including a brokerage, IRA, and custodian account.
There is also a premium plan where you get one on one access to a Certified Financial Planner® for a one-time setup fee of $300 and then $30 per month. You’d need $25,000 to invest in order to join the premium plan.
- Fees: $0 for statndard; $300 set-up fee and $30 per month with a $25,000 minimum at the premium level.
- Minimum: $5,000
- Benefits: Zero cost rebalancing investments, automatic tax-loss harvesting, and online tools at the standard level, and access to a CFP® at the premium level.
Schwab’s main competitor, Fidelity, now has its own robo-advisor, Fidelity Go. This service now charges no annual management fees on balances up to $10,000.
There is no account minimum to open, but you’d need at least $10 to invest — making Fidelity Go an accessible tool for new investors. And, this platform does not charge individual investment expense ratios.
Unfortunately, there’s no tax-loss harvesting which could cost you more at tax time in some scenarios. And, Fidelity could make it easier to transfer in other securities. As of now, you’d have to deposit cash. You couldn’t even transfer funds from another Fidelity account.
But if you already use Fidelity — which I recommend as an online stock broker for self-directed accounts — you can benefit from adding a Fidelity Go account.
- Fees: $0 on balances
- Minimum: $0
- Benefits: Free auto rebalancing of investments, expense ratios absorbed into management fee, non-invested cash earns 1% interest.
TD Ameritrade Essential Portfolios
TD Ameritrade now has a robo as well. Essential Portfolios charges a 0.3% annual management fee and requires a $5,000 minimum balance to join.
You could lower the buy-in to $500 if you set up automatic deposits which is a good idea anyway. If you set up an auto-transfer you can afford, you’ll never even miss the money.
Like all the best robos, Essential Portfolios includes free auto rebalancing and tax-loss harvesting.
Since Ameritrade doesn’t have its own exchange-traded funds, it partners with Morningstar which I see as a plus. You’ll get low expense ratios and great choices for funds.
You could also choose TD Ameritrade’s socially responsible investing plan which taps ETFs comprised of companies that meet requirements for social awareness. (These funds tend to have a higher expense ratio.)
- Fees: 0.3% annual management fee on all balances.
- Minimum: $500 w/ auto deposits; $5,000 without
- Benefits: Free auto rebalancing and tax-loss harvesting; low expense ratios on most ETFs.
Summary of The Best Robo Advisors
|Robo-Advisor||Minimum Investment Amount||Fees|
|Betterment||$0||0.25% – 0.40%|
|Wealthsimple||$0||o.40% – 0.50%|
|Personal Capital||$100,000||0.49% – 0.89%|
|Acorns||$5||$1 – $3/mo|
|Blooom||$0||$10 / mo|
|Vanguard Digital Advisor||$3,000||0.15%|
|Ellevest||$0||0.25% – 0.50%|
|Fidelity Go||$0||0% – 0.35%|
Why Robo Advisors Are A Good Option
Investing requires solid strategies to maintain and grow wealth while minimizing risks.
Robo-advisors can help you find this balance while giving you a hands-off approach by:
- minimizing risk through tax-loss harvesting in taxable accounts
- doing automatic account rebalancing in high growth portfolios
- paying strong interest rates on insured cash management accounts
- steering your ship towards higher growth potential within your risk tolerance.
How Do You Choose The Best Robo-Advisor?
The right robo for you has the tools to meet your investment goals and a fee you don’t mind paying.
If you’re just having fun and would like to experiment with a few robo-advisors, you’ll find several free options in the list above. Keep in mind these free services aren’t really free. They earn interest on the non-invested cash in your account.
If you’re looking for a permanent solution that protects your tax liability and matches your growth strategy, you’ll probably want a management fee-based robo. Some of these paid platforms even pay interest on your non-invested cash.
As you shop around, consider these factors:
- Management Fees: As I just said, a lot of the best robos charge no management fees. Be wary of flat-fee plans which get costly on low balances.
- Expense Ratios: These fees pay for the actual index funds and ETFs your robo invests your money in. These fees keep the funds you’re buying into up and running.
- Rebalancing: This should be a core feature for any robo-advisor. Otherwise, the different growth rates of different types of funds will throw off the ratios of your asset classes.
- Tax-Loss Harvesting: Most robos will optimize your account to minimize tax losses within taxable accounts.
- Account Types: If you’re investing for retirement, make sure the robo you’re considering offers IRAs and any other planning tools you’d like to use.
- Human advisors: You don’t have to have built-in support from a human financial advisor. After all, robo-advisors are defined as algorithm-based investing. But if you’d like to talk to someone, make sure the robo you’re considering offers this option. (And don’t confuse technical support with financial advice.)
Should You Use a Robo-Advisor?
Here’s the bottom line: Robo-advisors are hands-off investment tools. You open an account, identify your goals and risk tolerance, deposit money, and then let the computer do the work.
If you crave a more hands-on approach, you may want an online stock broker. Many of the services above offer both.
And, of course, there’s no rule against having multiple kinds of accounts. Why not put a portion of your portfolio in a robo and then self-direct the rest?
Since robo-advisors offer mutual funds, ETFs, and index funds, they could add some stability to your investment strategy and help you grow your wealth even if you have a few missteps in your self-directed accounts.
All this at a very low cost.
Vanguard Digital Advisor is an all-digital service. Digital Advisor’s annual net advisory fee is approximately 0.15% across your enrolled accounts for a typical investment portfolio, although your actual net fee will vary depending on the specific holdings in each enrolled account. Vanguard Digital Advisor charges a 0.20% annual gross advisory fee to manage Vanguard Brokerage Accounts. However, we’ll credit you for the revenues that The Vanguard Group, Inc. (“VGI”), or its affiliates receive from the securities in your Digital Advisor managed portfolio (i.e., at least that portion of the expense ratios of the Vanguard funds held in your portfolio that VGI or its affiliates receive). Your net advisory fee can also vary by enrolled account type. The combined annual cost of Vanguard Digital Advisor’s annual net advisory fee plus the expense ratios charged by the Vanguard funds in your managed portfolio will be 0.20% for Vanguard Brokerage Accounts. For more information, please review Form CRS and the Vanguard Digital Advisor brochure.
Vanguard Digital Advisor’s services are provided by Vanguard Advisers, Inc. (“VAI”), a federally registered investment advisor. VAI is a subsidiary of VGI and an affiliate of VMC. Neither VAI nor its affiliates guarantee profits or protection from losses.