Hybrid robo advisors aim for the best of both worlds.
Robo advisors have their benefits, but sometimes, you need a real person to consult with. Enter the hybrid robo advisor. Like other robo advisors, the hybrids offer low-cost investments based on Nobel Prize-winning research to match your risk level. In addition, newer hybrid robo advisors marry the efficiency of a computerized investment manager with the comfort of a human financial advisor to answer your money questions. Most robo advisors also rebalance your investments to your preferred asset mix and harvest losses to minimize your tax bill. The following seven robo advisors give you that human touch when you need it.
Personal Capital Advisors
Known for its free dashboard to track finances, Personal Capital is also a paid robo advisor. Personal Capital Advisors gives you a dedicated licensed certified financial planner and an investment portfolio evenly allocated across all sectors, unlike competitors’ market-weighted portfolios. There’s a wider range of asset classes too, including U.S. and international stocks and bonds, gold, real estate, international real estate, energy, food and metals. The robo advisor also buys individual stocks for the U.S. allocation of client portfolios. Investment minimums are $100,000, with fees starting at 0.89 percent and dropping to 0.49 percent for accounts north of $10 million. Although higher than the competition, the fees are less than most human financial advisors.
Betterment Premium
Launched in 2008, Betterment began as a digital-only robo advisor but later created its Premium service in response to customers with complex questions, according to Alex Benke, Betterment’s vice president of financial advice and planning. Betterment found that as investors amassed more wealth, their questions became more sophisticated. Premium members get unlimited meetings with Betterment’s certified financial planners, but all customers can text financial professionals through their mobile app messaging, Benke says. Along with standard investments, Betterment, which has no investing minimum, also offers smart beta and socially responsible investments. Digital customers pay 0.25 percent of managed assets and Premium customers 0.4 percent. Fees are waived for investors with $2 million in managed assets.
Ellevest Premium
Designed for women, Ellevest is the new robo on the block. Co-founder Sallie Krawcheck felt that women were underserved by the investing industry. Ellevest uses more conservative planning simulations than most robo advisors and considers taxes, fees and inflation in its forecasting. Ellevest Premium users get certified financial planners and certified career coaches. Investments include exchange-traded funds for both U.S. and international stocks and bonds, as well as funds for local-currency emerging markets and U.S. dollar-denominated emerging bonds. There are no investment minimums, and fees are 0.25 percent for Ellevest Digital and 0.5 percent for Ellevest Premium.
Wealthsimple
At Wealthsimple, all clients have access to financial advisors. Plus, there are no investment minimums and the first $5,000 is managed free. Most people seek financial advice for “big life events like getting married or buying a house,” says Dave Nugent, Wealthsimple’s chief investment officer. “We think it’s important that people can access high-quality financial advice in those moments.” Besides diversified portfolios, Wealthsimple offers impact investment and, in a nod to Islamic investors, Halal options. The basic platform costs 0.5 percent and includes portfolio selection, rebalancing and tax-loss harvesting. Investors with more than $100,000 get a discounted fee of 0.4 percent as well as additional tax efficiency and access to VIP airport lounges.
Schwab Intelligent Advisory
An established brokerage, Schwab also has two robo-advisor levels and claims to be the first large firm to offer automated investing. The basic robo service, Schwab Intelligent Portfolios, is free and has a $5,000 minimum investment but no access to certified financial planners. A 0.28 percent fee (capped at $900 per month) and a $25,000 investing minimum, however, gets you Schwab Intelligent Advisory. It combines a fully automated robo portfolio with a digital financial plan and unlimited access to human advisors. “Our goal is to democratize financial planning by making it easier and more affordable,” says Tobin McDaniel, Charles Schwab senior vice president of digital advice.
FutureAdvisor
Unlike other robo advisors, this BlackRock subsidiary will manage your assets in accounts at Fidelity or TD Ameritrade — no need to transfer them over. You just link your existing accounts to the company’s paid robo-advisor service, though users of FutureAdvisor’s free retirement planning dashboard get a free investment review. The robo service costs 0.5 percent, requires a $10,000 minimum and offers human advisors to all clients. Robo-advisor users also receive investment management, rebalancing and tax-loss harvesting. Another unusual feature: The managed platform lets you hold a few personally selected securities in your account, apart from the recommended ETFs. In some cases, FutureAdvisor will manage a robo customer’s 401(k) or give plan advice.
Vanguard Personal Advisor Services
Vanguard’s robo automatically comes with human financial advisors, who act as the platform’s gatekeeper, and a steep investment minimum — $50,000. Clients with $50,000 to $500,000 in assets are assigned a team of advisors. Larger accounts get a dedicated financial planner. Investments also deviate from the norm and include mutual funds, ETFs and even actively managed funds. Portfolios are rebalanced quarterly (most robos rebalance assets more frequently). Tax-loss harvesting isn’t automatic but is determined by your financial advisor. The management fee is among the lowest — 0.3 percent for assets below $5 million and drops to 0.2 percent for account balances of $5 million to $10 million. Larger balances get greater price reductions.
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7 Robo Advisors With a Human Touch originally appeared on usnews.com
