Want to start investing with the help of advisors but don’t have the funds to afford one?
Robo-advisors are a class of financial advising that provides investment advice and management online using mathematical rules and algorithms. These algorithms are executed by software and thus financial advice does not require human intervention. The software utilizes its algorithms to automatically allocate, manage and optimize clients’ assets.
What makes robo-advisors different from brokerage accounts or micro-investing apps?
Robo-advisors help you decide how your money will be invested. With online brokerage accounts, you do the research and choose your investments yourself. And with micro-investing apps can start investing with smaller dollar amounts.
Find the best online brokerage account and micro-investing app by searching the financial marketplace.
Personal Capital: Best for Digital Wealth Management
Personal Capital offers a premium version of its popular free finance tracking app that includes direct management of your investments. If you’re not using the free financial management tool yet, click here to learn more.
With Personal Capital Wealth Management, investors get a long-term investment plan that is tailored to meet your financial goals and managed by a fiduciary.
- Hybrid offering with online advice and human guidance
- The account minimum is $100,000.
Wealthsimple: Best for Beginners
Wealthsimple is an automated investing service founded in Canada and offered in the United States. Wealthsiple currently serves 65,000 clients and has over $1.5 billion in assets under management. They offer investors socially responsible investment offerings.
With Wealthsimple, you get long-term investment management accounts with no minimums:
- Your money is invested in a diversified portfolio of low-cost index funds. There is a $0 account minimum.
- Under $99,000 is managed 0.5% and 0.4% above then 0.5% annual management fee of asset size. The cost is higher than other robo-advisors.
Betterment: Best Low Cost
Betterment is an online investment company creating investment portfolios using low-cost indexed-based exchange-traded funds (ETFs) in broad market sectors. It is an SEC-registered broker-dealer and member of FINRA/SIPC.
A good option for beginner investors and others who have low balances. There are additional benefits to using Betterment:
- A hands-off approach, with automatic rebalancing and goal-based tools. There is a $0 minimum account balance requirement.
Wealthfront: Best for Hands-off Approach
Wealthfront is an online financial advisory firm offering investing and financial planning services. With their automated investing services, you can have individual and joint non-retirement accounts, Roth, traditional, SEP, and rollover IRAs, trusts, and 529 Plans.
Wealthfront is a good option for beginner investors:
- Account minimum of $500 with the first $10,000 managed free and 0.25% annual fee above that amount
- Tax-loss harvesting, automatic rebalancing, and competitive interest rates on FDIC insured cash accounts
Futureadvisor: Best for Fidelity and TD Ameritrade Account Holders
FutureAdvisor is an all-inclusive investment management service offering a free service with a comprehensive retirement analysis. It offers free portfolio analysis and an upgraded service to manage your portfolio.
- Accounts supported include accounts with Fidelity and TD Ameritrade
- Direct management of individual and joint non-retirement accounts, traditional and Roth, rollover, and SEP IRAs
- Account minimum is $10,000
Are Robo-Advisors Worth it?
Robo-advisors are helpful in giving you a more hands-off approach to your investing. You can take advantage of the algorithms and platforms to create wealth. If you’re not ready to invest on your own with an online discount brokerage and want some guidance without the cost of a human financial advisor, then consider trying one of these firms.