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The Best Robo Advisor for Different Types of Investors

Find a robo advisor that matches your investing style.

Robo advisors aren’t what they used to be. 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 based on what type of investor you are.

Betterment: For the beginning investor who doesn’t want to outgrow their robo advisor.

With no account minimum, Betterment is a great robo advisor to start investing — and keep 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 it’s 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 percent (Digital) or 0.4 percent (Premium)

Account minimum: None (Digital) or $100,000 (Premium)

Blooom: For the investor who only invests through work.

If you have a 401(k), you need to know about Blooom, says Shannah Compton Game, an 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.

Management fee: $10 per month

Account minimum: None

Vanguard Personal Advisor Services: For the investor who wants everything to stay virtually the same.

The mutual fund behemoth now has its own robo component called Vanguard Personal Advisor Services with Ongoing Guidance. Their robo advisor 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. The plan will generally be Vanguard funds-based and not include individual securities. Also of note: you need to have over $500,000 to receive an assigned advisor; anything below that gets you a team of advisors.

Management fee: 0.30 percent – 0.05 percent based on account size

Account minimum: $50,000

Acorns: For investors who hate saving and college investors.

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. As an added bonus: college students get their Acorns Core plan for free.

Management fee: $1, $2 or $3 per month depending on plan

Account minimum: None

Wealthfront: For the investor who believes computer programs make better investors than humans.

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 also only have to pay 0.25 percent per year, deducted monthly.

Management fee: 0.25 percent

Account minimum: $500

Schwab Intelligent Portfolios: For the investor who hates fees.

Schwab’s Intelligent Portfolios is one of the best robo advisors for low-cost investing. With no annual fee or commissions, all you pay is the fees on your investments. Portfolios use 53 ETFs from 10 fund families, including Schwab funds, the revenue from which is how the platform makes money. ETFs include stock, bond, precious metals and REIT funds that meet the robo advisor’s low-cost and index-based investing philosophy. There’s a $5,000 account minimum and no human advisor component — for human guidance you’d need their Intelligent Advisory platform, which costs 0.28 percent per year.

Management fee: None

Account minimum: $5,000

WiseBanyan: For investors with less than $5,000 who also hate fees.

If don’t have $5,000 to invest but still want to avoid additional fees, WiseBanyan will also manage your account for free — and all you need is $1 to get it. (The robo advisor makes money through its à la carte optional products and services.) By using passive ETFs, WiseBanyan keeps investment fees to a minimum, too. Their Core Portfolio funds average 0.12 percent and go as low as 0.03 percent. You don’t get any human guidance, but for a free service, can you really complain?

Management fee: None

Account minimum: $1

Wealthsimple: For the passive, Modern Portfolio Theory investor.

Wealthsimple believes in Modern Portfolio Theory, which focuses on reducing risk through diversification, and passive investing. To this end, it creates portfolios of eight to 10 ETFs that focus on one of 10 unique asset classes. It also automatically rebalances and, unlike many other robo advisors, doesn’t charge extra for tax-loss harvesting or expert financial advice. Once you exceed $100,000 invested, you qualify for Wealthsimple Black, which comes with a lower fee and other perks like access to VIP airline lounges (what every investor really wants from a robo advisor).

Management fee: 0.5 percent (0.4 percent for accounts over $100,000)

Account minimum: None

M1 Finance: For the DIY investor.

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

Swell: For the investor who wants socially responsible investing.

While many robos have socially responsible investing options (hello, Betterment and Wealthsimple), if you want SRI and nothing but SRI, the best robo advisor to use is Swell. Instead of relying on ETFs or mutual funds, Swell builds its own portfolios of companies that address high-impact themes such as renewable energy or zero waste. Companies must align revenues with at least one of the 17 U.N. Sustainable Development Goals. Since Swell invests in individual stocks, there’s no expense ratios to contend with, nor does it charge trading fees. Ain’t that swell?

Management fee: 0.75 percent

Minimum investment: $50

Ellevest: For women investors or men who want to invest like them.

Women have a different approach to investing, according to Ellevest, which is why they 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. Fees for that are determined by just how much you’ve got.

Management fee: 0.25 percent (Digital) or 0.5 percent (Premium)

Account minimum: None ($50,000 for Ellevest Premium)

Corrected Sept. 24, 2018: A previous version of this story misstated the funds used in Schwab Intelligent Portfolios.

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The Best Robo Advisor for Different Types of Investors originally appeared on usnews.com

Correction 09/24/18: A previous version of this story misstated the funds used in Schwab Intelligent Portfolios.



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