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Best Robo-Advisors for March 2024

Review Updated
Matt Frankel, CFP®
By: Matt Frankel, CFP®

Our Brokerages Expert

Ashley Maready
Check IconFact Checked Ashley Maready
Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.

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.

Our 12 Best Robo-Advisors for March 2024

Broker/Advisor Best For Commissions Next Steps
Vanguard Digital Advisor® Offer Image
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. 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.
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= Excellent
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Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. 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

E*TRADE Core Portfolios Offer Image
Rating image, 4.0 out of 5 stars.
4.0/5 Circle with letter I in it. 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
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Rating image, 4.0 out of 5 stars.
4.0/5 Circle with letter I in it. 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%

M1 Finance Offer Image
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. 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 Circle with letter I in it. 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.

Acorns Offer Image
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. 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 Circle with letter I in it. 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

Ellevest Offer Image
Rating image, 4.0 out of 5 stars.
4.0/5 Circle with letter I in it. 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 Circle with letter I in it. 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

Award Icon 2024 Award Winner
SoFi Automated Investing Offer Image
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. 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 Circle with letter I in it. 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%

Award Icon 2024 Award Winner
Betterment Offer Image
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. 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 Circle with letter I in it. 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

Ally Invest Robo Portfolios Offer Image
Rating image, 4.0 out of 5 stars.
4.0/5 Circle with letter I in it. 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 Circle with letter I in it. 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.
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= Excellent
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Best For:

Conservative investors

Commission:

$0 per trade, management fee 0.30%, expense ratio 0.05%-0.20%

Award Icon 2024 Award Winner
Wealthfront Offer Image
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. 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
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= Poor
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. 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
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Best For:

Lowering taxes

Commission:

$0 per trade, management fee 0.25%

Schwab Intelligent Portfolios Offer Image
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. 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 Circle with letter I in it. 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.
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= Excellent
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Best For:

Larger accounts

Commission:

$0 per trade, $0 mgmt fee, 0.00% to 0.19% expense ratio

Fidelity Go® Offer Image
Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. 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 Circle with letter I in it. 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.
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Best For:

Minimum balance

Commission:

No commission for balances up to $25,000; 0.35% per year for balances over $25,000

Stash Offer Image
Rating image, 4.0 out of 5 stars.
4.0/5 Circle with letter I in it. 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
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Rating image, 4.0 out of 5 stars.
4.0/5 Circle with letter I in it. 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.
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= Excellent
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Best For:

Beginners

Commission:

$3-$9 monthly

How to choose a robo-advisor

Here are few things to look for during a robo-advisor comparison:

  • Account type: Make sure the account type you want is offered by a robo-advisor.
  • Human services offered: If you want features like access to human financial advisors, limit your search to robo-advisors that offer them.
  • Perks: Check for discounts or perks -- many robo-advisors offer these to their customers.

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.

Vanguard Digital Advisor®
Open Account for Vanguard Digital Advisor®

On Vanguard Digital Advisor®'s Secure Website.

Ratings Methodology

Our Rating:

Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. 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
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Bottom Line

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.

Fees:

0.15% to 0.20% fee

Account Minimum:

$3,000

Open Account for Vanguard Digital Advisor®

On Vanguard Digital Advisor®'s Secure Website.

Our Rating:

Rating image, 4.0 out of 5 stars.
4.0/5 Circle with letter I in it. 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.
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Bottom Line

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.

Fees:

$0 per trade, management fee 0.30%, expense ratio 0.06%-0.12%

Account Minimum:

$500

Open Account for E*TRADE Core Portfolios

On E*TRADE Core Portfolios Secure Website.

Our Rating:

Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. 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
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Bottom Line

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.

Fees:

$0 commissions and no management fee. M1 Plus membership costs $3 per month.

Account Minimum:

$100

Open Account for M1 Finance

On M1 Finance's Secure Website.

Our Rating:

Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. 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
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Bottom Line

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.

Fees:

$3-$9 monthly

Account Minimum:

$0

Open Account for Acorns

On Acorns' Secure Website.

Our Rating:

Rating image, 4.0 out of 5 stars.
4.0/5 Circle with letter I in it. 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.
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Bottom Line

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!

Fees:

$12 monthly

Account Minimum:

$0

Open Account for Ellevest

On Secure Website.

Award Icon 2024 Award Winner

Our Rating:

Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. 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
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Bottom Line

With no management fee or account minimum, SoFi Automated Investing is made easy with help from their robo investors.

Fees:

$0 per trade, expense ratio 0.03%-0.08%

Account Minimum:

$1

Award Icon 2024 Award Winner

Our Rating:

Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. 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
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Bottom Line

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.

Fees:

$0 per trade, management fee of $4 per month or 0.25% per year

Account Minimum:

$0

Our Rating:

Rating image, 4.0 out of 5 stars.
4.0/5 Circle with letter I in it. 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
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Bottom Line

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.

Fees:

$0 per trade, management fee 0.30%, expense ratio 0.05%-0.20%

Account Minimum:

$100

Award Icon 2024 Award Winner

Our Rating:

Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. 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
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Bottom Line

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.

Fees:

$0 per trade, management fee 0.25%

Account Minimum:

$500

Our Rating:

Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. 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
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Bottom Line

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.

Fees:

$0 per trade, $0 mgmt fee, 0.00% to 0.19% expense ratio

Account Minimum:

$5,000

Our Rating:

Rating image, 4.5 out of 5 stars.
4.5/5 Circle with letter I in it. 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
Bottom Line

Fidelity Go® provides a simple, easy-to-understand pricing structure with access to financial planning tools, robo-trading and educational resources.

Fees:

No commission for balances up to $25,000; 0.35% per year for balances over $25,000

Account Minimum:

$0

Our Rating:

Rating image, 4.0 out of 5 stars.
4.0/5 Circle with letter I in it. 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
Bottom Line

Fees:

$3-$9 monthly

Account Minimum:

$0

Editor's Note: TD Ameritrade is transitioning to Charles Schwab

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.

How to open an account with a robo-advisor

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.

How to get started with a robo-advisor

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:

  • How comfortable you are with volatility and risk
  • Your future plans
  • Your investment objectives.

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!

How much money do I need to invest with a robo-advisor?

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.

How much does a robo-advisor cost?

There are two primary types of fees for most robo-advisors:

  • Management fee: Not all robo-traders charge a management fee, but some do. This fee gives you access to the robo-advisor's features and services. Management fees are often expressed as a percentage of your managed assets on an annual basis, so a 0.25% management fee means that you'll pay $2.50 per year for every $1,000 invested. Some robo-advisors charge a flat fee instead of a percentage.
  • Investment expenses: The funds a robo-advisor invests your money into -- the same ones a human advisor would invest in -- often come with their own fees, called the "expense ratio."

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%.

Are robo-advisors safe?

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.

Are robo-advisors worth it?

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:

  • Newer investors: If you don't have a ton of money to invest or you don't have the level of knowledge to be comfortable making your own investment decisions, a robo-advisor can help you get started with a custom-designed portfolio and minimal capital.
  • Hands-off investors: Many people who know the basics simply don't want to spend their time researching and managing investments and could benefit from a program robo trading on their behalf. Robo-stock advisors can allow you to put your investments on auto-pilot, and at a cheaper cost than hiring an advisor.
  • Tax concerns: If you're investing a large amount of money or you have a high income, the tax optimization strategies offered by some robo-traders can easily justify the management fees all by themselves.
  • You don't like fees: As we've seen, lower investment fees can make a big difference over time. If you're concerned about paying too much for investment advice, a robo-stock advisor could be the solution for you.

What is a robo-advisor?

"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.

How do robo-advisors work?

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.

Do robo-advisors only invest in ETFs?

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 methodology

Why you can trust us

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:

1. Low costs to invest

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:

  • Stock, ETF, and mutual fund commissions
  • Margin rates
  • Maintenance and transfer fees
2. Great customer support and service

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:

  • Presence (or not) of branch offices
  • Quality of online and phone support
3. Strong product quality and features

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:

  • Trading platform and mobile app quality
  • Research offering quality
  • Broad access to ETFs and mutual funds

FAQs

  • "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.

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