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Throughout most of modern history, if you needed investment guidance, you had to hire a financial advisor. There are certainly benefits to having the advice of a seasoned professional, but there's one big drawback -- an investment advisor can be expensive.
Now there's an alternative option: robo-advisors. Also referred to as robo-investors or robo-traders, these are platforms that allow you to put your investment strategy on auto-pilot. In this guide, we'll share our picks for the best robo-advisors and take you through the most important things you should know about robo-investing.
If you're looking for a place to start, one brokerage our experts highly recommend is Vanguard Digital Advisor®. It's a great fit for hands-off investors seeking a low-cost investment solution. These features, among others, make it one of our favorite brokerages.
Broker/Advisor | Best For | Commissions | Next Steps | |
---|---|---|---|---|
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Best For:
Low fees and low account minimums |
Commission:
0.15% to 0.20% fee |
|
Rating image, 4.0 out of 5 stars.
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Rating image, 4.0 out of 5 stars.
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Best For:
Socially responsible investing |
Commission:
$0 per trade, management fee 0.30%, expense ratio 0.06%-0.12% |
|
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Best For:
Investing and banking in one |
Commission:
$0 commissions and no management fee. M1 Plus membership costs $3 per month. |
|
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Best For:
Rounding up your purchases to invest |
Commission:
$3-$9 monthly |
|
Rating image, 4.0 out of 5 stars.
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Rating image, 4.0 out of 5 stars.
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Best For:
Women |
Commission:
$12 monthly |
|
2024 Award Winner
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Best For:
Financial advice |
Commission:
$0 per trade, expense ratio 0.03%-0.08% |
|
2024 Award Winner
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Best For:
Beginners |
Commission:
$0 per trade, management fee of $4 per month or 0.25% per year |
|
Rating image, 4.0 out of 5 stars.
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Rating image, 4.0 out of 5 stars.
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Best For:
Conservative investors |
Commission:
$0 per trade, management fee 0.30%, expense ratio 0.05%-0.20% |
|
2024 Award Winner
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Best For:
Lowering taxes |
Commission:
$0 per trade, management fee 0.25% |
|
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Best For:
Larger accounts |
Commission:
$0 per trade, $0 mgmt fee, 0.00% to 0.19% expense ratio |
|
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Rating image, 4.5 out of 5 stars.
4.5/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Best For:
Minimum balance |
Commission:
No commission for balances up to $25,000; 0.35% per year for balances over $25,000 |
|
Rating image, 4.0 out of 5 stars.
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Rating image, 4.0 out of 5 stars.
4.0/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best = Excellent = Good = Fair = Poor |
Best For:
Beginners |
Commission:
$3-$9 monthly |
Here are few things to look for during a robo-advisor comparison:
After researching and completing a robo-advisor comparison, you should choose a platform that has features that are the best fit for you and your needs. There's no such thing as a "best robo-advisor" that is a perfect fit for everyone (and if there is, we haven't found it), so prioritize what's important to you and your investing style.
With a low fee structure, this to-the-point platform is a great option for investors with at least $3,000 to start. Their robo-advisor further simplifies an already simple investing experience.
0.15% to 0.20% fee
$3,000
On Vanguard Digital Advisor®'s Secure Website.
Along with great access to customer service, low-cost investments, and automatic rebalancing, E*TRADE Core Portfolios also boosts one of the best robo-investors in the industry. A great option for anyone with at least $500 to start investing.
$0 per trade, management fee 0.30%, expense ratio 0.06%-0.12%
$500
On E*TRADE Core Portfolios Secure Website.
The standout perks include a modern app, banking, and one of the best robo-investors all-in-one. The inclusion of no management fee sweetens the pot.
$0 commissions and no management fee. M1 Plus membership costs $3 per month.
$100
On M1 Finance's Secure Website.
Acorns takes a unique spin on the robo-advisor model by rounding up your purchases to invest that change into an automated robo-investing strategy. Importantly, its costs are low, and it's a solid fit for people wanting to manage their investments and banking under one roof.
$3-$9 monthly
$0
On Acorns' Secure Website.
With a competitive management fee and no account minimum, this is a great broker for a variety of people. Their ability to factor in woman oriented financial issues is a unique plus!
$12 monthly
$0
On Secure Website.
With no management fee or account minimum, SoFi Automated Investing is made easy with help from their robo investors.
$0 per trade, expense ratio 0.03%-0.08%
$1
Betterment offers a wide array of investment services and account types, along with essential cash management features such as a high-yield cash account. Best yet, Betterment is now offering up to one year managed free. Top it off with one the best robo investors available, and Betterment is a perfect fit for investors of every experience level.
$0 per trade, management fee of $4 per month or 0.25% per year
$0
With competitive pricing, low minimums, and features such as automatic rebalancing, Ally Invest Managed Portfolios is a great choice for anyone without a lot of cash to spend.
$0 per trade, management fee 0.30%, expense ratio 0.05%-0.20%
$100
If you have a large account balance or are in a high tax bracket, Wealthfront could be great for you as tax-loss harvesting can result in significant savings. Robo trading and advising capabilities are just one of the many investor-friendly features that help to simplify the process.
$0 per trade, management fee 0.25%
$500
With perks like automatic rebalancing and tax-loss harvesting, this robo-trader could be a great choice if you're looking to invest at least $5,000.
$0 per trade, $0 mgmt fee, 0.00% to 0.19% expense ratio
$5,000
Fidelity Go® provides a simple, easy-to-understand pricing structure with access to financial planning tools, robo-trading and educational resources.
No commission for balances up to $25,000; 0.35% per year for balances over $25,000
$0
$3-$9 monthly
$0
TD Ameritrade has been acquired by Charles Schwab, and the company expects all accounts to be transitioned by the end of 2024. We've removed TD Ameritrade from our best-of lists to align with this development. Here at The Ascent, you can trust that we're constantly evaluating our top broker picks to bring you current recommendations.
Once you've picked a robo-advisor, the next step is to fill out an account application on its website. You'll have to provide some personal details, including your Social Security number, and you'll probably need to fill out some tax-related information.
Opening an account with a robo-advisor is typically a quick and straightforward process. There aren't many hoops to jump through -- after all, the idea of a robo-advisor is to make investing as painless and approachable as possible.
After you fill out your account application, your robo-advisor will likely ask some questions to help determine how it should invest your money. It'll already know your age from your application, and this is a big determinant of how your investments should be allocated. But you'll also need to answer questions about things like:
Some robo-advisors might allow you to skip the questions and select from several pre-made portfolios (usually with names like "aggressive" or "moderately conservative").
The next step is to make your initial deposit. Many robo-advisors have a minimum initial deposit requirement, and even some of those that don't have a minimum amount required before your money can be invested. After you've made a deposit, the robo-advisor will do the rest!
This depends on the robo-advisor you choose. Some will let you open an account with as little as $1; others require hundreds or thousands of dollars.
Make sure to keep an eye out for separate minimums to access certain features. For example, you might need to invest a certain amount of money in the account to be able to access human financial advisors.
There are two primary types of fees for most robo-advisors:
It's important to consider the combination of these fee types, often collectively referred to as the "all-in" cost of a robo-trader. All-in costs typically range from 0.03% to 0.50%.
With a robo-advisor, your account is protected in the event that the brokerage or robo-advisor fails. The Securities Investor Protection Corporation, or SIPC (essentially the investing version of the FDIC) protects the cash and securities held in your account at a SIPC-member brokerage firm.
However, with a robo-advisor, the value of the investments in your account can go down. If the stock market is weak, or the economy struggles, investments can lose money. While the type of index funds most robo-advisors use are unlikely to result in a total loss (or anything close to one), and the stock market's value generally rises over long periods of time, it's important to know that there's no guarantee the value of your account will go up and that it could lose money, especially over short periods.
Yes, for some investors. Robo-investors generally charge lower fees than human investors, and can be less stressful than picking investments on your own.
A robo-advisor may be worth it to you if you fit into one of these groups:
"Robo-advisor," or "robo-investor," refers to any investment platform that automates key components of investment planning that were traditionally handled by a human advisor. They use algorithms to help design an age- and risk-tolerance appropriate investment portfolio using ETFs and mutual funds.
Features and costs among robo-advisors vary significantly.
Robo-traders automate certain components of the investment planning process. Robo-stock advisors can assess your risk tolerance, determine your investment time horizon and goals, and allocate your investment portfolio to maximize return potential without too much risk.
All of the robo-advisors we cover use exchange-traded funds, or ETFs. Generally, a robo-advisor will allocate your money into a portfolio of ETFs that are appropriate for your risk tolerance, age, and investment goals.
Typically, the ETFs used by robo-advisors fall under the category of index funds, which are passive investment vehicles that aim to track the long-term performance of a certain benchmark index.
For example, an S&P 500 index fund would own all 500 stocks in that index to replicate its performance over time. Some robo-advisors use actively managed ETFs (where the stocks it owns are picked by investment managers), but this is far less common.
Robo-advisor products are rated on a scale of one to five stars, primarily focusing on fees, ease of use, and quality of the trading platform and research offerings. Our highest-rated products generally include the following:
We run a comprehensive review of routine fees, since account management costs can have a meaningful impact on your ability to invest profitably. Items assessed may include:
A high level of scrutiny is put on a brokerage's service and support, especially considering that a customer will likely interact with their brokerage's support team on multiple occasions. Items assessed may include:
Today's online brokers need a well-rounded suite of products and features to stand out in our ratings since we think brokerages need to provide a one-stop shop that meets an investor's comprehensive needs. Items assessed may include:
"Online brokerage" is a broad term that refers to any financial firm that facilitates the purchase of investment vehicles like stocks, bonds, ETFs and mutual funds. "Robo-advisor" refers to a specific type of online brokerage account that chooses and maintains an investment portfolio automatically on behalf of clients.
Many are designed to match or beat the market, but it's not a sure thing. For example, most robo-advisors offer a selection of passive investment funds that are designed to match the performance of certain benchmark indices over time (say, the S&P 500). And some offer actively managed fund options that have the goal of beating the market, but there's no guarantee they'll actually do so.
Our Brokerages Experts
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
Betterment disclaimers
†Betterment Cash Reserve ("Cash Reserve") is offered by Betterment LLC. Clients of Betterment LLC participate in Cash Reserve through their brokerage account held at Betterment Securities. Neither Betterment LLC nor any of its affiliates is a bank. Through Cash Reserve, clients' funds are deposited into one or more banks ("Program Banks") where the funds earn a variable interest rate and are eligible for FDIC insurance. Cash Reserve provides Betterment clients with the opportunity to earn interest on cash intended to purchase securities through Betterment LLC and Betterment Securities. Cash Reserve should not be viewed as a long-term investment option.
Funds held in your brokerage accounts are not FDIC‐insured but are protected by SIPC. Funds in transit to or from Program Banks are generally not FDIC‐insured but are protected by SIPC, except when those funds are held in a sweep account following a deposit or prior to a withdrawal, at which time funds are eligible for FDIC insurance but are not protected by SIPC. See Betterment Client Agreements for further details. Funds deposited into Cash Reserve are eligible for up to $1,000,000.00 (or $2,000,000.00 for joint accounts) of FDIC insurance once the funds reach one or more Program Banks (up to $250,000 for each insurable capacity—e.g., individual or joint—at up to four Program Banks). Even if there are more than four Program Banks, clients will not necessarily have deposits allocated in a manner that will provide FDIC insurance above $1,000,000.00 (or $2,000,000.00 for joint accounts). The FDIC calculates the insurance limits based on all accounts held in the same insurable capacity at a bank, not just cash in Cash Reserve. If clients elect to exclude one or more Program Banks from receiving deposits the amount of FDIC insurance available through Cash Reserve may be lower. Clients are responsible for monitoring their total assets at each Program Bank, including existing deposits held at Program Banks outside of Cash Reserve, to ensure FDIC insurance limits are not exceeded, which could result in some funds being uninsured. For more information on FDIC insurance please visit www.FDIC.gov. Deposits held in Program Banks are not protected by SIPC. For more information see the full terms and conditions and Betterment LLC's Form ADV Part II.
**The annual percentage yield ("APY") on the deposit balances in Betterment Cash Reserve ("Cash Reserve") is 4.00% and represents the weighted average of the APY on deposit balances at the banks participating in Cash Reserve (the "Program Banks") and is current as of Feb. 6, 2023. This APY is variable and subject to change daily. Deposit balances are not allocated equally among the participating Program Banks. A minimum deposit of $10 is required, but there is no minimum balance required to be maintained. The APY available to a customer may be lower if that customer designates a bank or banks as ineligible to receive deposits. APY applies only to Cash Reserve and does not apply to checking accounts held through Betterment Checking. Cash Reserve and Betterment Checking are separate offerings and are not linked accounts.
For Cash Reserve (“CR”), Betterment LLC only receives compensation from our program banks; Betterment LLC and Betterment Securities do not charge fees on your CR balance.
Vanguard disclosures
Visit vanguard.com to obtain a prospectus or, if available, a summary prospectus, for Vanguard and non-Vanguard funds offered through Vanguard Brokerage Services. The prospectus contains investment objectives, risks, charges, expenses, and other information; read and consider carefully before investing.
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.
Vanguard Digital Advisor is an all-digital service that targets an annual net advisory fee of 0.15% across your enrolled accounts, although your actual fee will vary depending on the specific holdings in each enrolled account. To reach this target, Vanguard Digital Advisor starts with 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 managed portfolio by Digital Advisor (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 "https://personal.vanguard.com/pdf/vanguard-digital-advice-brochure.pdf" Form CRS and the Vanguard Digital Advisor brochure.
Vanguard funds not held in a brokerage account are held by The Vanguard Group, Inc., and are not protected by SIPC. Brokerage assets are held by Vanguard Brokerage Services, a division of Vanguard Marketing Corporation, member FINRA and SIPC.
Vanguard Marketing Corporation, Distributor of the Vanguard Funds
E*TRADE services are available just to U.S. residents.