10 Leading Robo-Advisors Tested & Compared for 2024

Discover the Top 10 Robo-Advisors: Rigorously Tested & Compared!

According to our research, the best robo-advisors are M1 Invest, Betterment, Wealthfront Ellevest, and Fidelity Go. In a competitive market, the quality and benefits of automated investing are improving every year.

☆ Research You Can Trust ☆

My analysis, research and testing stems from 25 years of trading experience and my Financial Technician Certification with the International Federation of Technical Analysts.

Robo-advisors are all the rage and a fast-growing sector of the financial services industry. Offering automated portfolios tailored to your life goals, personal beliefs, and risk profile, they replace much of the value of a human financial advisor with a structured and automated process.

The huge bonus is the accessibility to your portfolio performance from your computer or smartphone. Robo-advisors also provide automated tax-loss harvesting and portfolio rebalancing, saving you a lot of effort, time, and money.

Top 10 Best Robo Advisor / Automated Investing Services
Top 10 Best Robo-Advisors / Automated Investing Services

What Is A Robo-Advisor?

A robo-advisor is an online investment management service that provides automated, computer-generated advice based on your input. It combines innovative technology with traditional financial planning principles to provide tailored portfolios for individual investors. Most robo-advisors invest in low-cost ETFs and index funds, making them ideal for long-term investors looking for a convenient way to diversify their portfolios without paying expensive broker fees.

Robo-Advisor Insights

The idea behind robo-advisors is that software is more accurate, honest, and less biased than human advisors. For instance, a robo-advisor will not likely receive a commission or kickback on equities or securities it sells. Also, promoters claim that robo-advisors are less likely to make mistakes than people. Notably, algorithms are better at math than most humans. Lastly, robo-advisors will not suffer from the emotional decision-making that most investors and traders try to battle against.

The Best Robo-Advisors SummaryLiberated Stock Trader Review & Test Award: Best of 2024.

  • M1 Invest: Best Performance, Service & Low Commissions
  • Betterment: Best for Ethical & Retirement Portfolios
  • Wealthfront: Diversified Automated Investing
  • Ellevest: Best for Women Planning for Their Life Goals
  • TD Ameritrade Essential Portfolios: Social Investing
  • Vanguard Personal Advisor Services: Personal Service But Expensive.
  • Fidelity Go: Good for US Investors Seeking No Minimum Balance

10 Best Automated Robo-Advisors

1. M1 Invest: Best Performance, Service & Low Commissions

M1 Invest is a great option for investors seeking low investment commissions, excellent performance, and customer service. Their platform allows you to grow your investment portfolio with no minimum balance required. They also have a selection of customizable portfolios tailored to different goals and risk appetite levels. M1 Invest’s automated investing platform helps you maximize your returns by taking advantage of fractional shares and tax-loss harvesting. Plus, their mobile app makes it easy to manage your portfolio.

Liberated Stock Trader Review Winner

Rating

  • Service Rating: ★★★★★
  • Fees AUM: 0.0%
  • Hidden Fees: None
  • Fund Performance: M1 claims its funds offer a 9.87% rate of return.
  • Typically within 2% of the comparative benchmark

Pros

★ Commission-free automated investing.
★ Low minimum accounts balance of $100.
★ Allows you to buy fractional shares of any stock or fund.
★ Military-grade 4096-bit encryption and two-factor authentication for security.
★ Offers lines of credit.
★ M1 Securities are insured for up to $500,000 by SIPC.
★ American accounts are insured up to $250,000 by FDIC.

Cons

✘ Focused on US customers Only.
✘ No hybrid advisors are available.
✘ Not for Day Traders

Visit M1

M1 Finance Robo-Investment Service Details

M1 Finance is the only robo-advisor service in our review that offers commission-free trading for their customers. This means your account will have no management fee whatsoever. This is very positive for the service, but the question is, how do they make money? They make money from short-term lending of available cash funds to the overnight inter-bank market if you utilize their borrowing facility or invest in an M1 Plus account. Finally, they will receive small rebates from liquidity providers for their order flow. This is all quite normal and used throughout the industry.

Another great bonus of this mature service from M1 is that tax-loss harvesting is automatically integrated into the account. This means that when you choose to withdraw funds from your account, the algorithms will consider which securities to sell, prioritizing those that are incurring losses so that they can offset future gains.

In addition, M1 promotes the purchase of fractional shares as a unique selling point; this means that if your portfolio dictates a high-priced share purchase, you can still be fully invested by purchasing a fraction of the share.

Another nice addition is an integrated checking account, M1 Plus, which includes a Visa card to access your funds easily.

The Investing Methodology

m1-pie-portfolios
M1 Pie

M1’s investing approach is based on expertly curated portfolios. Each portfolio is called a “Pie”; each pie comprises multiple stocks with specific weightings based on what risk or exposure you seek. Close to 100 expert pies have varying return and past performance levels. You can select an expert pie or even build your own. The great thing is that when you send funds to your account, the money is then automatically fully invested into your pie based on your allocation rules, and because there are no fees, this will not impact your account’s bottom line.

Investing Performance

M1 provides many expert portfolios to choose from, and depending on when you open an account and choose to invest, the returns on your investment can vary. Suffice it to say, M1 claims that, on average, their expert portfolios (pies) are within or slightly above the underlying market return.

Visit M1 Finance Read the Full M1 Review

2. Betterment: Best for Ethical & Retirement Portfolios

Betterment is great for those looking to build a retirement portfolio or invest in ethical companies. They offer diversified portfolios and cutting-edge technology, making finding the right investments for your needs easy. With their automated investing feature, you can put your money into stocks and bonds without constantly monitoring your investments. They also have tax options to maximize your investment growth and tax-deferred savings. Whether you’re looking to save for retirement or want to invest responsibly, Betterment has a range of products designed to help you reach your goals.

Rating

  • Service Rating: ★★★★☆
  • Fees AUM: 0.25%
  • Hidden Fees: None
  • Fund Performance: Betterment claims it offers 5% higher returns than the average US investor receives.

Pros

★ Offers hybrid advisor services.
★ No minimum investment is needed.
★ Offers a variety of products, including Trust Accounts.
★ Special services like tax-loss harvesting and socially responsible investing are available.
★ Focused on smaller investors.
★ Focuses on retirement.

Cons

✘ Focuses on index funds rather than individual stocks.
✘ It could place some serious limits on investor choices and behavior.
✘ Claims to use “guardrails” to protect investors from themselves.
✘ No details of security arrangements are available.

Betterment Investment Service Details

Betterment offers a robust robo-investing service centered around the individual. The service can be fully automated or benefit from the hybrid robo-advisor service, which means there is also a human touch to the service and portfolio curation. The yearly management fee of 0.25% of assets under management (AUM) comes in at the lower end of the average fee structure of the other providers. The hybrid advisor service is an additional service that grants you access to a human expert Certified Financial Planner for a fixed cost. Plans are one-off payments from $149 for a “getting started” package to a retirement planning package for $399. I like the fixed-cost approach to accessing a financial planner’s services as it makes your costs predictable.

The Investing Methodology

The Betterment investing experience starts with a series of questions to understand better your needs, goals, and risk tolerances, which makes a lot of sense and is similar to the experience of having a human financial advisor. This then recommends a stock versus bonds allocation for your portfolio. The Betterment stock allocation at its core invests using Markowitz’s modern portfolio theory but instead uses ETFs as the vehicle for low-cost investing and international diversification.

Investing Performance

According to its literature, Betterment’s proven past returns equate to a 5% higher return than the average US investor attains yearly. This varies depending on the percentage of stocks versus the bond allocation you select in your account. One contributor to this solid return is the highly efficient approach to tax-loss harvesting.

Betterment is currently the third-largest robo-advisor service in the USA, with over $9.5 billion in assets under management.


3. Wealthfront: Diversified Automated Investing

Wealthfront is another robo-advisor service offering an easier and more efficient investment method. This automated investment platform takes a modern approach to investing by diversifying your assets using industry-standard ETFs, which provide low-cost access to international markets. You can also customize the risk allocations in your portfolio, such as stocks vs. bonds, cash, and gold. Wealthfront’s portfolios are tailored to you, whether you are an experienced investor or starting.

Wealthfront utilizes tax-loss harvesting and asset location strategies to ensure maximum investment returns. This intelligent technology helps minimize taxes while maximizing returns. Wealthfront manages over $20 billion in assets for its clients and offers an easy onboarding process so anyone can invest confidently.

Rating

  • Service Rating: ★★★★☆
  • Fees AUM: 0.25%
  • Hidden Fees: None
  • Fund Performance: Typically within 1% of the comparative benchmark

Pros

★ Offers free financial planning.
★ Easy to Use App
★ Allows Passive Investing
★ Offers tax-loss harvesting and other loss-mitigation strategies
★ One low fee
★ Low $500 minimum investment

Cons

✘ No hybrid advisors are available.
✘ No human financial planning advice is available.
✘ Completely automated strategies.
✘ No details of security arrangements are available.

Wealthfront offers a completely automated service to its clients for a lower than the average yearly fee of 0.25% of assets under management. The unique offering here is that you can integrate all your financial accounts; for example, your bank and Wealthfront can analyze your spending patterns, income, and outgoings. They can also combine what they have learned about you with 3rd party information on mortgages, housing costs, school fees, etc., to be able to provide your personalized automated advice.   If one of your financial goals is to save up for a deposit on a four-bedroom apartment in New York, they can advise you what the typical downpayment would be, how much you need to invest, and how long it will take to achieve that goal.

The Investing Methodology

Like the other robo-advisor services, Wealthfront’s asset allocation is again based on Markowitz’s modern portfolio theory, which finds that broad asset allocation across asset classes is the best way to optimize risk and reward. This is then achieved using a Wealthfront-selected set of exchange-traded funds (ETFs) assessed and rated for performance, stability, and expected performance in different macroeconomic climates. Like the other robo-investment services, this is based on a mix of US and International ETFs combined with exposure to Bonds and Real Estate.

Investing Performance

Wealthfront, to their credit, does not claim to be able to beat the market; instead, they are a safe and effective pair of hands with which to trust your money. So, do not expect outsize fund performance; expect performance in line with or slightly under the S&P 500. Many have bought into this ethos as Wealthfront clients entrust them with over $10 billion, making them the fourth-biggest robo-advisor service in the USA.


4. Ellevest: Best for Women Planning for Their Life Goals

Ellevest is a robo-advisor service specifically tailored towards women and their life goals. It is specially designed for the unique challenges faced by female investors, such as wage gaps and longer lifespans. Ellevest offers personalized portfolios aligned with personal goals like retirement, buying a home, starting a business, or paying off debt. It also has thoughtful features like planning for maternity leave and saving for multiple objectives at once.

Ellevest utilizes sophisticated algorithms to select investments from ETFs and mutual funds that maximize returns while minimizing risk in each portfolio. With its gender-specific approach, Ellevest can be an ideal choice for female investors looking to grow their wealth over long-term horizons.

Rating

  • Service Rating: ★★★★☆
  • No Fund Performance Data Available
  • Fees AUM: 0.25%
  • Hidden Fees: None

Pros

★ $0 Minimum investment
★ No penalty for withdrawals.
★ Female CEO Sallie Krawcheck
★ Some hybrid services are available on accounts.
★ Offers algorithms tailored for a customer’s salary, gender, and lifespan.
★ Private wealth management services available.
★ Claims to be designed by women for women.

Cons

✘ Charges additional fees for hybrid advisory services.
✘ Unclear if tax-loss harvesting is available.
✘ No details of security arrangements are available.

Ellevest Robo-Service Details

In a world unfortunately still dominated by men, Ellevest seeks to breathe fresh air into the stuffy male-dominated investment industry. The unique selling point and niche market that Ellevest has carved out focuses on the unique needs of women. Interestingly, women live longer than men, usually have a career break for children, and earn less than men; this means that women require different advice more suited to their life events.

Our stock market statistics have also uncovered that women tend to invest in the stock market less than men, so I am certainly in favor of a service that makes investing more accessible and tailored to women’s needs. It all starts with the ability to open an account with Ellevest with no minimum deposit. Ellevest also caters to the more socially responsible and caring nature of women by offering portfolios focusing on sustainable and accountable companies, including prioritizing investments in companies that promote women’s issues, have more diversity of women on the board, and companies that can demonstrate reducing carbon footprint and promoting environmental change. This is all to be applauded, but what about performance?

Ellevest Robo-Advisor Performance

Ellevest does not promise to deliver performance better than the benchmark indices; instead, it counters that notion by suggesting that reaching your financial and personal goals is more important than great performance. The typical Ellevest portfolio will include US stocks, international stocks, currencies, bonds, and real estate, some of which include socially responsible impact funds.

Visit Ellevest


5. TD Ameritrade Essential Portfolios: Social Investing

TD Ameritrade Essential Portfolios: Social Investing is a service that helps users invest socially responsibly. This service combines automated and digital investment advice with the option to add impact investments to create a personalized portfolio that reflects the user’s financial goals and values.

This approach allows for diversifying an investment portfolio while allowing users to invest their money in ways that reflect their beliefs about how the world should work. The platform also offers free financial education resources and access to real-time market data. With TD Ameritrade Essential Portfolios, users can have peace of mind knowing they are taking responsibility for their future while making a positive social impact through their investments.

Rating

  • Service Rating: ★★★☆☆
  • Fund Performance: No Performance Data Available
  • Fees AUM: 0.3%
  • Hidden Fees: None

Pros

★ Hybrid advisors available.
★ Socially aware investing available.
★ Personalized portfolios available.
★ Free tax-loss harvesting on all accounts.

Cons

✘ A $5,000 minimum deposit is required.
✘ No banking services or insured accounts are available.
✘ No details of security arrangements are available.

TD Ameritrade Essential Portfolios Robo-advisor Service Details

This service starts well with a relatively low fee of 0.3% of assets under management and no hidden fees. You will need $5,000 to open an account initially. You then begin by answering a few questions about yourself and what you want to achieve; then, TDA will recommend one of five core portfolios based on your information.

At least via the messaging chat system, you can ask the portfolio management team questions.

Investment Methodology & Results

Like many other robo-advisors, TDA will recommend selecting exchange-traded funds (ETFs) based on modern portfolio theory, which seeks to minimize risk and optimize reward. The ETF selection is essentially based on the research performed by Morningstar analysts.

It is nice to see that tax-loss harvesting and automatic portfolio balancing are included and available for all accounts. Finally, as a socially responsible and environmentally aware person, I am glad that TDA offers five socially aware portfolio options so you can invest in alignment with your beliefs.


6. Vanguard Personal Advisor Services: Personal Service But Expensive.

Vanguard Personal Advisor Services (VPAS) is a service offered by Vanguard, one of the world’s largest and oldest investment companies. The main draw of this service is that it pairs clients with a personal financial advisor who will cater to their individual needs and goals. This includes advice on portfolio selection and asset allocation, as well as retirement planning, estate planning, and college savings. VPAS advisors also benefit from having access to Vanguard’s extensive research library. In addition, VPAS monitors the performance of clients’ portfolios continuously.

The downside of this service is that it comes with a price tag – an annual fee equal to 0.30% of assets managed, or $20 per month for accounts containing over $50,000. This is significantly more expensive than other robo-advisors or online brokerages, typically charging 0 – 0.25%.

Rating

  • Performance Rating: ★★★☆☆
  • Fund Performance: In line with S&P 500 average returns
  • Vanguard claims its US stock funds offer a 7.51% rate of return
  • Fees AUM: 0.6%
  • Hidden Fees: Fund Fees

Pros

★ Offers both hybrid investors and robo-advisors.
★ Clear fee schedule
★ Custom Financial Plans available.
★ Phone support available to US customers.

Cons

✘ A $50,000 minimum investment is required.
✘ Charges higher than average fees.
✘ A mutual fund operator owns it. So, Vanguard has an incentive to push for mutual funds.
✘ No details of security arrangements are available.

Vanguard Personal Advisor Service Details

Once established, the Vanguard service approach is a people-first solution with hybrid robo-advisor management of the portfolio. To access this service, you will need to invest $50,000 from the beginning, which means that Vanguard targets the affluent or those on the road to being affluent. For this $50,000, you will get a personal advisor who will understand your needs, goals, and risk profile and then construct a portfolio. Once this is established, the portfolio will be provided to you online to check the progress of your investment choices. The reinvestment of your additional funds and tax loss harvesting is automated.

The personal touch costs more, with a yearly fee of 0.6% of assets under management and additional costs of the ETF/Mutual Fund fees; this is at the higher end of the cost spectrum of robo-advisors. This does not seem to matter to most as Vanguards is the largest robo-advisor in the USA, with over $100 billion in assets under management. Finally, you can access your advisor via email or phone.

The Investing Methodology & Performance

As Vanguard is one of the largest providers of ETFs and Mutual Funds, it selects its funds to be part of your suggested portfolio. This earns them fund management fees and your account’s 0.6% AUM fee. Vanguard does not claim to provide outsized returns; it is more focused on a higher level of customer service and personalizing your portfolio based on your life goals. Do not expect stellar profits, but do expect good customer service.


7. Fidelity Go: Good for US Investors Seeking No Minimum Balance

Fidelity Go is an all-in-one, tech-enabled robo advisor designed for US investors. The service offers many investment products and strategies without minimum balance requirements. Fidelity Go also provides personalized advice tailored to the individual’s risk tolerance and financial goals and a well-stocked portfolio optimized to generate desired returns.

Customers can access their portfolios and related information anytime through an easy-to-use online platform. Furthermore, Fidelity Go includes excellent customer support, available via phone or email should you require assistance with anything related to your investments.

Rating

  • Performance Rating: ★★★☆☆
  • Fund Performance: No Performance Data Available
  • Fees AUM: 0.35%
  • Hidden Fees: Fund Fees

Pros

★ No Minimum balance is required to open accounts.
★ Hybrid advisor services available.
★ Open to any US resident over 18 years of age.
★ Fidelity will offset some additional fees with a variable fee credit.
★ You can start investing with $10.

Cons

✘ Higher than average fees.
✘ The day-to-day investment trading decisions are made by 3rd party, “Strategic Advisors LLC.”
✘ May automatically invest in fee-charging accounts like the Fidelity Government Reserves Fund.
✘ No banking services are available.
✘ No details of security arrangements are available.

Fidelity Go Service Details

Fidelity Go is one of the smallest robo-advisor services, but it invests in growing its assets under management. The service itself is relatively simple. You select how much you want to invest per month and how aggressively balanced you want your portfolio, and Fidelity will do the rest. An aggressive portfolio allocation will balance US stocks at 60%, foreign stocks at 25%, and Bonds at 15%. The most conservative balance would be for those nearing retirement, with 20% US and international stocks and 80% bonds and short-term cash.

Of course, with Fidelity, you can always access their human personal financial advisory services for a fee. Talking of fees, this account’s costs amount to 0.35% of your assets per year, plus any ETF fund fees according to your fund allocation. This is not the ideal mix of personal or intelligent performance-driven robo-advisory service. In addition to this, Fidelity does not even choose the assets to invest in; this is outsourced to a third party. Overall, Fidelity’s half-hearted attempt was to enter a booming robo-advisor market.


8. Schwab Intelligent Portfolios: Good Hybrid Advisor Services

Schwab Intelligent Portfolios is a good hybrid financial advisory service because it combines human advice with robo-advisor technology. This service offers digital portfolio management, meaning you can invest in stocks and bonds without relying on a third party to make your decisions. Schwab also provides consultations with financial advisors who can help you make the best decisions based on your individual goals and needs.

Clients appreciate the combination of human and automated services, which gives them more control over their investments while offering support. Schwab’s low fees of 0.28% of assets per year plus any ETF fund fees make this service attractive for those looking for professional investment assistance without breaking the bank.

Rating

  • Service Rating: ★★★☆☆
  • Fund Performance: No Performance Data Available
  • Fees:  ETF Fees
  • Hidden Fees: None

Pros

★ No advisory fee and commissions on some accounts.
★ Hybrid advisors available.
★ A portion of the funds is held in an FDIC-insured account at Schwab Bank.
★ A variety of accounts, including IRAs, custodial accounts, and trust accounts, are available.
★ Schwab claims its robo-advisor can automatically rebalance accounts to lower risks.

Cons

✘ A $5,000 minimum investment is required.
✘ Tax-loss harvesting is only available on portfolios over $50,000.
✘ Schwab admits to making money off sales ETFs and other investment products.
✘ No details of security arrangements are available.

Schwab Intelligent Portfolios Service Details

Schwab is the second-largest robo-advisor services provider in the USA, with over $27 billion in assets under management. Unlike the other behemoth Vanguard, Schwab does not charge you a fixed yearly fee for your assets under management; this is a bonus. Instead, you will only have to pay for the exchange-traded fund fees.

There is no hybrid advisor option; the system is fully automated, which helps reduce overall costs.

The Investing Methodology & Performance

Schwab makes no claims to portfolio performance, so you can expect performance to be lower than industry benchmarks like the S&P 500. Typically, a Schwab portfolio will consist of US stock ETFs, international stock ETFs, emerging market stock ETFs, and Bonds.


9. Acorns: Small Change Investing

Acorns is an investment platform that aims to simplify the process of investing for beginners. It offers a variety of tools and features designed to help users start their investment journey. Acorns is a great option for those who want to get started investing without needing to understand the complexities of the stock market or manage their own portfolios.

Acorns works by taking small amounts of money (known as “acorns”) from your bank account and investing them into a variety of exchange-traded funds (ETFs). Acorns also provides various educational resources, such as videos and articles, to help new investors learn about the market. The service has a low minimum investment of $5 and charges no account maintenance fees. Visit Acorns

For those who want to start investing in stocks but don’t have a lot of time or money to do it, Acorns is a great option.

Rating

  • Service Rating: ★★★☆☆
  • Fund Performance: No Performance Data Available
  • Fees:  Flat Fee
  • Hidden Fees: TBD

Pros

★ Simplicity and Accessibility: One of the standout benefits of Acorns is its simplicity and accessibility (source). The platform provides a user-friendly interface requiring little to no prior investment knowledge. This makes it an excellent choice for new investors.

★ Automated Investing: Acorns employs a passive and automated investing strategy (source). It automatically invests your spare change, rounding up your purchases to the nearest dollar and investing the difference.

★ Diverse Portfolio: Acorns offers a diverse portfolio, allowing users to invest in various sectors and asset classes (source).

Cons

✘ Flat Rates: While Acorns’ low-cost passive investing solution is appealing, its management fees are flat rates starting from $3 per month. This could be a downside for those with a smaller balance, as the fees could represent a higher percentage of their investment.

✘ Limited Customization: Acorns takes control of the investing reins, meaning there’s limited opportunity for users to customize their investment strategies based on their unique preferences or risk tolerance (source).


10. Morgan Stanley Core Portfolios: Pricey, With Hidden Fees

You can open a Morgan Stanley robo-advisor account for $5,000, and for the pleasure of using their service, you will be charged a 0.35% fee on assets under management. In addition, the small print indicates additional fees for the ETFs and Mutual Funds that you will own. For this initial investment, you will receive an automated detailed initial investment plan tailored to your goals and risk profile based on the questionnaire you complete online.

They also offer hybrid advisor services, so you could speak with or get human advice on your portfolio.

Rating

  • Service Rating: ★★★☆☆
  • Fund Performance: No Fund Performance Data Available
  • Fees AUM: 0.35%
  • Hidden Fees: ETF & Mutual Fund Fees

Pros

★ Offers a detailed investment plan.
★ Bases portfolios on an investor’s risk tolerance.
★ Algorithm runs thousands of simulations to forecast portfolio performance.
★ Hybrid advisors available.

Cons

✘ Higher than average fee.
✘ A $5,000 minimum investment is required.
Simulations could offer unrealistic pictures of market performance.
✘ No details of security arrangements are available.

Morgan Stanley Access Investing Robo-advisor Service Performance

Again, as with many robo-advisor services, there are no claims about returning market-beating percentages to customers; instead, the service is focused on enabling an automated and balanced portfolio recommendation. So do not expect to beat the market. One thing I like a lot is that they offer the flexibility to select topics you feel passionate about. They will skew your portfolio in favor of companies aligning with your values or beliefs. For example, suppose you prefer your investments to tilt in favor of companies or funds that promote gender diversity, climate action, or even robotics & artificial intelligence. In that case, the Morgan Stanley Access Service will have you covered.

Summary

In performing the hundreds of research hours for this in-depth review, I have also been on a learning journey. Robo-advisors make a lot of sense for those who want to invest but do not have the knowledge or time to investigate every investment decision thoroughly. Secondly, optimizing your tax-loss harvesting and automatic portfolio rebalancing is a serious advantage of these services and can amount to an impactful saving compounded over many years.

Lastly, having full access and transparency to your fund’s performance and having your fund aligned with your beliefs are excellent steps forward for the financial services industry.

In summary, M1 Finance hit the sweet spot in portfolio selection with its offering of 100 different professionally selected portfolios for you to choose from. However, I like the Ellevest approach for a female-oriented service and Morgan Stanley’s ability to skew portfolios in favor of my investing and social preferences.

FAQ

What are robo-advisors?

Robo-advisors are digital platforms that provide automated, algorithm-driven financial planning services with little to no human supervision. They collect information about your financial situation and future goals through an online survey and then use this data to offer advice and/or automatically invest your assets.

How do robo-advisors work?

Robo-advisors use algorithms to build and manage investment portfolios. After you answer questions about your investment goals and risk tolerance, the robo-advisor will create a portfolio tailored to your needs. It will then manage this portfolio, rebalancing it as necessary.

What are the best robo-advisor services?

The best robo-advisor services, like M1 Invest, are typically those that offer low fees, a wide range of investment options, and user-friendly interfaces. Some top-rated robo-advisors include Betterment, Wealthfront, and Schwab Intelligent Portfolios.

Are robo-advisors safe?

Yes, robo-advisors are generally safe. They are regulated by the same agencies as traditional financial advisors, including the Securities and Exchange Commission (SEC). Additionally, most robo-advisors are insured by the Securities Investor Protection Corporation (SIPC).

Do robo-advisors charge fees?

Yes, robo-advisors typically charge a small percentage of your managed assets as a fee. This fee covers the cost of managing your portfolio and is usually significantly lower than the fees charged by traditional financial advisors.

Can robo-advisors handle complex financial situations?

While robo-advisors are excellent for basic investing and portfolio management, they may not be equipped to handle complex financial planning scenarios. For these situations, a human, financial advisor, or hybrid robo-advisor may be better suited.

What is the minimum investment for robo-advisors?

The minimum investment required by robo-advisors varies. Some, like Betterment, have no minimum investment, while others may require thousands of dollars to get started.

Can I choose my own investments with a robo-advisor?

Most robo-advisors build and manage your portfolio for you based on your risk tolerance and investment goals. However, some do allow for a certain level of customization.

Are robo-advisors good for beginners?

Yes, robo-advisors are a great choice for beginners. They offer a low-cost, low-stress way to start investing, with user-friendly interfaces and automatic portfolio management.

Do robo-advisors offer tax-loss harvesting?

Yes, many robo-advisors offer tax-loss harvesting, a strategy that involves selling losing investments to offset the taxes paid on investment gains.

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Learn More About Robo Advisors With Our 12 Part Q&A Series

1★ What is a Robo Advisor & How Do They Work? 7★ Are Robo Advisors A Good Idea? 8 Advantages Uncovered
2★ Hybrid vs. AI vs. Robo Advisors 8★ Are Robo Advisors Worth It? What Are The Alternatives?
3★ How Do Robo Advisors Really Work? In 7 Steps 9★ Do Robo Advisors Beat The Market? Fund Performance Uncovered
4★ A Hybrid Robo Advisor- What Is It & How Do They Work? 10★ Are Robo Advisors Safe? Security of Assets Examined
5★ Robo Advisors vs. Human Advisors 11★ Top 10 Best Robo Advisors [160 Point Review & Comparison]
6★ Top 20 Best Robo Advisor Returns & Fees Comparison 12★ Review Winner M1 Finance
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Barry D. Moore CFTe
With a wealth of experience spanning 25 years in stock investing and trading, Barry D. Moore (CFTe) is an author and Certified Financial Technician (Market Analyst) recognized by the International Federation of Technical Analysts (IFTA). Notably, he has also held executive positions in leading Silicon Valley corporations IBM Corp. and Hewlett Packard Inc.

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