Robo-advisors are an exciting development in the world of investing. Our guide to robo-advisors covers everything from the basics of how they work to the advantages and disadvantages of using them.
We also discuss different types of robo-advisors and their respective fees, risk levels, strategies, and other features. Finally, we explain why robo-advisors are a great way to start investing for beginners or those wanting to take advantage of automated solutions without sacrificing control.
What Is A Robo-advisor?
At its core, a robo-advisor is a computer algorithm that provides automated advice and portfolio management. It combines modern investment theories with technology to create portfolios tailored to individual goals.
Robo-advisors offer several advantages over traditional financial advisors. For starters, they don’t require the same level of expertise or knowledge; anyone can use them.
A Robo-advisor is a computer program or algorithm designed to automate the job of a financial advisor by automating the buying & selling of stocks or ETFs and structuring an investment portfolio based on the investor’s risk tolerance. These services are provided directly to investors online or via a smartphone app.
A Robo-advisor is a digital application that offers users financial advice created by algorithms, artificial intelligence, or mathematical formulas. The term Robo-advisor is short for robot advisor. However, the phrase Robo-advisor is inaccurate. To explain, a Robo-advisor is a digital construct, usually an algorithm or artificial intelligence (AI) rather than an actual robot.
However, “robo” and “bot” are financial-industry slang terms for digital financial applications. For example, trading robots or trade bots handle most trades on the world’s financial markets.
Interestingly, news reports indicate many financial industry professionals hate the terms “robo” and “bot.” However, those words are the standard industry technology for digital advisors.
The idea behind Robo-advisors is that software is more accurate, more honest, and less biased than human advisors. For instance, a Robo-advisor is not likely to receive a commission or kickback on equities or securities it sells.
In addition, 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 History of Robo-advisors
The first known Robo-advisor was a semi-automated financial manager offered by Mint in 2006. More sophisticated Robo-advisors appeared during the Great Financial Meltdown in 2008. Robo-advisors’ appearance resulted from the popular distrust of human financial advisors and investment bankers.
In 2010, John Stein launched Betterment, the first Robo-advisor marketed to the general public. Over the next few years, traditional asset managers like Vanguard, Morgan Stanley, Charles Schwab, and JPMorgan Chase entered the Robo-advisor market.
By 2018, Robo-advisors were managing $200 billion in assets, Barrons estimates. Vanguard’s Personal Advisor Services was the largest Robo-advisor, overseeing $101 billion in assets. Schwab is the second-largest Robo-advisor, managing $27 billion in assets. In addition, government agencies like the Nevada State Treasurer are turning to Robo-advisors to manage public investments.
Moreover, some regulatory agencies, like the Monetary Authority of Singapore, are issuing licenses to Robot Advisors. The US Securities and Exchange Commission (SEC) grants them the same legal status as human, financial advisors.
The amount of funds controlled by Robo-advisors is growing dramatically. Algonest estimates that Robo-advisors worldwide could manage over $2 trillion in assets by 2020.
What Is An AI Robo-advisor?
New, more sophisticated Robo-advisors that utilize artificial intelligence (AI) and machine learning to analyze investments are entering the market. Interestingly, some of these Robo-advisors will do far more than offer financial advice. Moreover, many new Robo-advisors are also smartphone apps.
For example, Numerai is trying to build an artificial intelligence hedge fund linked to a cryptocurrency called Numerarie. Meanwhile, creators envision an app called Daneel as a combination of Robo-advisor and personal assistant you can access through your phone.
Other mobile robot advisors include Japan’s Theo and Bamboo. In addition, companies like Infinity Partners are developing robot wealth managers for rich clients.
Will Artificial Intelligence (AI) Advisors Replace Robo-advisors?
Investment banks are working with artificial intelligence because Robo-advisors have been a hard sell to affluent clients. Reuters reports that UBS sold its SmartWealth British robot advisor to SigFig in 2018. The Swiss bank sold SmartWealth because it was not making money.
Entrepreneurs like those behind Numerai hope to succeed where UBS failed by building AI advisors that can do everything human investment bankers and fund managers can. Companies like Numerai aim to create an AI that manages money without human help. However, today’s AI advisors are far from achieving that goal. On the other hand, many organizations are trying to build AI advisors that “think” for themselves.
How Do Robo-advisors Work?
A Robo-advisor is a software algorithm programmed to perform certain functions. For example, a Robo-advisor could sell a stock if its price rises over a certain level.
In addition, a Robo-advisor can offer specific kinds of advice. For instance, a Robo-advisor could recommend the stocks with the biggest dividends or the highest earning rate per share. Most Robot Advisors make decisions with mathematical formulas. However, a new generation of Robo-advisors that use machine learning and artificial intelligence to discern market patterns is coming online.
Specifically, solutions like Numerai and Sharpe Capital combine artificial intelligence (AI) and prediction markets. A prediction market is a pool in which people bet on the prices of equities or securities. The AI attempts to predict market outcomes by analyzing the betting patterns.
Some investors like Robo-advisors because they are faster and charge lower fees than traditional advisors. For instance, no bonuses or commissions are paid to Robo-advisor algorithms, like those paid to human advisors.
How Do Robo-advisors Make Money?
Like human advisors, Robo-advisors make money by charging fees to users. The difference is that Robo-advisors charge a much lower fee, sometimes as low as 0.15%.
However, a Robo-advisor can still make a lot of money because it can handle a far greater number of clients than a team of human professionals. For instance, a Robo-advisor could handle several million clients, earning hundreds of thousands of dollars worth of fees. Moreover, Robo-advisors can sell specific services or advice to the public—for instance, wire transfers, reports on specific stocks, or access to accounts. In addition, some Robo-advisors sell apps through venues like the Apple App Store and Google Play. The Robo-advisor makes money every time somebody buys its app.
Interestingly, a growing class of Robo-advisors is charging customers for non-investment services. Such services include balancing checking accounts, paying bills, billing clients, paying taxes, filing tax returns, and offering tax advice. Like banks, Robo-advisors make money by charging a fee to everybody they use such a service.
Moreover, a few services, such as M1-Finance, offer banking services like lending to clients. Hence, advisors like M1 Finance make money from the interest they charge and the fees on the leverage provided.
What Types Of Robo-advisors Are There?
Today, there are many Robo-advisors on the market. Additionally, new Robo-advisors appear almost daily. The most popular Robo-advisors are in the form of simple investment apps like Vanguard’s Personal Advisor Services. In detail, these simple investment apps manage accounts and make trades under specific conditions. For instance, an investment app could sell a stock if its price-earnings ratio (PE Ratio) is too high.
Automatic investment apps like M1 and Robin Hood offer instant, low-cost access to investment markets. For instance, M1 allows users to pick their stocks or ETFs or access 80 managed portfolios.
Meanwhile, artificial intelligence-powered apps, like Numerai and Sharpe Capital, use cutting-edge mechanisms like machine learning and prediction markets to make complex decisions. For instance, Numerai will try to predict market outcomes and bet against the markets.
In addition, next-generation Robo-advisors are controlling hedge funds, mutual funds, and even bank accounts. Hence, Robo-advisors could soon manage your money and offer financial advice.
What Is A Hybrid Robo-advisor?
A hybrid Robo-advisor combines a digital algorithm with a human investment advisor. To explain, the idea is to add a human touch to robo-investing.
The Hybrid Robo-advisors exist because many customers will feel better if there is a person to talk to. In addition, some people are uncomfortable with machines managing their finances.
Specifically, the average Robo-advisor combines a standard package of algorithms with a person. The robot advisor will handle most of the investment chores. However, customers can talk to a human whenever they want to.
An obvious use for hybrids is to get people comfortable with Robo-advisors. Asset managers often use hybrid advisors to deal with older customers and people who know little about finance.
How Do Hybrid Robo-advisors Work?
A human financial advisor could recommend Robo-advisors or algorithms to customers. The human advisor could also interview a customer and decide which Robo-advisor is right for her.
Interestingly, hybrid financial advisors are becoming popular. An Accenture survey estimates 68% of affluent investors prefer hybrid advisors, Investment News reports. Moreover, hybrid advisors could manage 10% of the investment wealth in the United States by 2020, MyPrivateBanking claims.
Under those circumstances, hybrid advisors could be the future of wealth management in the United States. An obvious advantage to hybrids is that they will enable human financial advisors to keep their jobs.
On the other hand, some investors could be more comfortable with Robo-advisors rather than human financial advisors. Many people distrust financial advisors because they view them as salespeople.
Moreover, younger people who grew up playing video games, surfing the internet, and using apps could prefer Robo-advisors. In particular, people under 35 could view a Robo-advisor as another useful app rather than a threat.
Hybrid Advisors vs. Robo-advisors
Some wealth management firms like Wealthfront refuse to use human financial professionals. Instead, Wealthfront uses algorithms and bots for everything. For example, Wealthfront advertises Automated Financial Management.
However, traditional investment firms like Morgan Stanley and mutual fund managers like Vanguard prefer hybrid advisors. Such organizations use hybrids because they work with customers of all ages and backgrounds.
Notably, those unfamiliar with the financial markets and investing are less trusting of innovations like Robo-advisors. However, Robo-advisors are more efficient and work better with large numbers of customers.
Strangely, Robo-advisors can provide a higher level of customer service. For instance, Robo-advisors can instantly respond to phone calls and emails and operate 24 hours a day, seven days a week. In addition, a Robo-advisor can instantly fulfill simple requests such as selling or buying equities or providing a balance.
Finally, smartphones and the internet can provide instant connectivity to Robo-advisors. Thus, Robo-advisors are perfect for people who want constant control over their investments.
Robo-advisor Performance Metrics
Evaluating Robo-advisor performance is difficult because there are vast differences between advisors. For instance, different advisors keep the customer’s money in cash at different levels.
Notably, Charles Schwab’s Intelligent Portfolios keep 6% of a customer’s investment in cash. To explain, a high level of cash lowers the exposure to market losses. Unfortunately, a high percentage of cash increases the exposure to inflation and lowers potential market gains.
On the other hand, most Robo-advisors keep less of a client’s money as cash. In addition, some Robo-advisors could allow you to choose the level of funds in cash.
For instance, cash is a poor investment for a younger person saving for retirement or an individual with a high income. However, cash is a good investment for a person with a limited income, such as a retiree.
Understanding Robo-advisor Performance
To explain, a person with a limited income is more likely to use their investment as an emergency fund. Hence, that person could lose money from buying and selling costs by trying to access extra cash.
The speed at which a Robo-advisor follows the market can help you make more money. For instance, a Robo-advisor can quickly sell stocks or funds before a loss or buy right after a price drop. Robo-advisor will instantly react to market trends.
The advantage of a quick reaction is that losses can be prevented. The disadvantage is that Robo-advisors’ decisions could be based on short-term trends. For example, a Robo-advisor could sell a stock when a price drop is temporary.
Finally, Robo-advisors can implement complex and hard-to-understand strategies like tax-loss harvesting. Robo-advisors can allow ordinary people to take advantage of complex investment strategies formerly reserved for hedge funds or investment bankers.
Unfortunately, such complex strategies can be hard to understand and evaluate. In particular, seeing the gains from complex investment strategies can take several years or longer. For example, it can take several years to determine if you are making money from a tax loss strategy.
Evaluating Robo-advisor Performance
The easiest way to evaluate Robo-advisor performance is to compare advisors’ one or two-year rates of return with the fees.
Determining an advisor’s rate of return is easy. You can figure out the actual rate of return by subtracting the fees the advisor charges from the advertised rate of return.
If you want to compare Robo-advisors, the best method is to compare their growth rate to the popular stock market indexes like the S&P (Standard & Poor) 500 or the Dow Jones. However, such comparisons only work with specific funds or portfolios. Hence, it is often impossible to tell when comparing the performance of a platform to that of the S&P 500.
Generally, a good rule of thumb is that a portfolio should be proven to beat the S&P or Dow Jones; the best Robo-advisors portfolio’s rate of gain should significantly exceed the S&P by at least 5% per year.
However, rates will vary yearly, and outside factors like inflation and taxation can eat up your returns. Notably, some high-income people could lose money if they earn a high rate of return without implementing a tax-loss strategy.
Thus, you will need to do research when looking for a robo-advisor. To complicate matters, the technology is new and changing all the time.
Performance can change quickly because some firms will constantly add new features and capabilities to Robo-advisors. Hence, you should regularly visit your advisors’ website and check out the new features.
Do Robo-advisors Beat The Market?
Robo-advisors should beat the market; otherwise, what is the point? Of the 10 Robo-advisors we investigated in our research, only five offered historic performance details. Only Wealthfront and M1 Finance offered any detailed performance reporting. These funds claim to have significantly beat the S&P 500 over the longer term.
[Related Article: Do Robo-advisors Beat The Market?]
Are Robo-advisors Safe?
Security and Transparency Matter for Robo-advisors. You must evaluate some other areas of performance, including security and transparency. Strangely, transparency is one of the most important areas of Robo-advisor performance, but many people ignore it. Transparency means the advisor lists all features, capabilities, and strategies.
For example, the manager lists all the equities in a portfolio and explains every strategy used. Management should tell you when they make a change or add a feature. In addition, they should provide clear explanations and justifications for any feature in plain English.
Hence, it would be best to avoid a Robo-advisor with low transparency. If you do not have a rudimentary grasp of what is going on, you should avoid a robo-advisor.
Are Robo-advisors Secure?
Finally, transparency is doubly important for security. For instance, an advisor should tell you about any security breach immediately. They should warn you so you can change accounts and passwords before crooks get into your other accounts.
The advisor must clearly explain all security features and protocols. Moreover, security features should work quickly. For instance, there should be an easy but secure way to access your account if you lose your password. An example of such backup access is an algorithm that sends a text to an encrypted phone if you change your password. They usually call such features as 2-step authentication.
Plus, the advisor should list all the security protocols and features and explain them. If an advisor does not provide a clear security picture, you should avoid it.
The bottom line is that a Robo-advisor with poor security and transparency will cost you money. Thus, avoid any Robo-advisor that is lacking in either security or transparency.
Are Robo-advisors A Good Idea?
The answer to the above question depends on what you want in a financial advisor.
Robo-advisors are a good idea if you want fast responses to requests, quick access to accounts, and fast answers to questions. In addition, a Robo-advisor is a good idea if you plan to conduct most of your financial research. For instance, a Robo Advisor can help someone who likes to evaluate and pick his stocks.
Moreover, a Robo-advisor can save a person with a simple portfolio and strategy money. If you only plan to put a little money in an investment account or buy a few stocks each month, a Robo-advisor can save you money. Algorithms can perform simple tasks, such as buying or selling stocks, faster and more accurately than humans for a lower price.
Are Human Financial Advisors a Good Idea?
On the other hand, a person with a poor understanding of the markets and little time to devote to investments could benefit from the human touch. Beginning investors usually learn a lot from a human advisor, particularly one willing to explain the process.
Conversely, the human touch is hard to quantify and value. For instance, a human advisor can make you feel better. However, a dishonest human advisor is strongly incentivized to lie or exaggerate to make money from commissions or fees.
One of the Robo-advisors’ greatest strengths is their honesty and impartiality. For instance, a Robo-advisor makes no commission on sales. Thus, a Robo-advisor has no incentive to recommend a particular investment or withhold negative information.
Are Robo-advisors Worth It?
In addition, a Robo-advisor has no emotional attachment to a particular investment. Thus, it could sell a money-losing favorite faster. Hence, the lack of a human touch can be a good thing for investments.
In contrast, many people value a relationship with an advisor and the insight they can bring. Therefore, your investment style determines whether a Robo-advisor will work for you.
Strangely, persons with a hands-on investment style and laid-back investors could benefit from Robo-advisors. For example, a hands-on investor will value the quick response and fast access. Meanwhile, a laid-back investor will like the idea of an automated system taking care of everything for her.
Thus, there are many advantages to Robo-advisors. In particular, Robo-advisors can offer small investors a higher level of service at a lower price. On the other hand, robo-investment is a new field with many risks. Thus, research Robo-advisors carefully before you entrust one with your money.
Should I Use A Robo-advisor?
Only you can answer that question, but the benefits are less effort to manage your portfolio and usually lower trading fees. If you select an Advisor with excellent transparency of reporting, holdings, and a good reputation, you should do well. If you prefer to manage every aspect of your investing, then Robo-advisors are not for you.
You may read our review of the Best Brokers in the USA.
FAQ
What is a robo-advisor?
Robo-advisors are digital platforms that automate financial planning with advanced algorithms. They gather information about your finances and goals through an online survey, providing tailored advice and seamlessly managing investments with cutting-edge technology. Simplified and optimized, robo-advisors offer an efficient user experience.
How do robo-advisors work?
Robo-advisors analyze users' financial situation and goals using advanced algorithms. They consider risk tolerance, age, income, investment horizon, and asset allocation. Based on this, they create an optimized portfolio tailored to individual needs. The platform manages investments, rebalancing portfolios as required, and provides features like tax-loss harvesting and automated deposits.
What are the best robo-advisor services?
M1 Invest is among the top-tier robo-advisor services, distinguished by their competitive fees, extensive investment options, and intuitive interfaces. Notable robo-advisors such as Betterment, Wealthfront, and Schwab Intelligent Portfolios consistently deliver exceptional value to investors.
Are robo-advisors secure?
Yes, robo-advisors are highly secure. They use sophisticated encryption technology to protect user data and confidential information and employ multi-factor authentication for access control. As with all online services, it is essential to review the security policies of each service before signing up. Additionally, many robo-advisors are registered with the Securities Investor Protection Corporation (SIPC)
Are robo-advisors expensive?
No, robo-advisors are typically very affordable. Most have no minimum account balance or signup fees and charge very low annual management fees ranging from 0.25% to 1%. Some also offer members special discounts and promotions that may reduce the overall cost of their services. Furthermore, there are hybrid robo-advisory options available that combine automated advice with access to a financial advisor.
Can robo-advisors manage complex financial scenarios?
While robo-advisors excel at basic investing and portfolio management, they might not effectively handle complex financial planning scenarios. In those situations, a human, financial advisor, or hybrid robo-advisor would be more suitable alternatives.
What is the minimum balance to start with a robo-advisor?
Many robo-advisors have no minimum balance requirements for accounts, so you can start investing with as little money as you wish. However, more advanced services may require higher initial deposits or annual fees. It's important to research your desired robo-advisor before signing up for their service to ensure you understand their terms and conditions.
Can I choose my investments with a robo-advisor?
Yes, most robo-advisors allow you to customize your portfolio according to your risk tolerance and goals. You can usually select from a pre-set list of asset classes like stocks, bonds, and cash or even pick individual securities for more control over your investments.
Are robo-advisors good for newbie investors?
Yes, robo-advisors can be a great way for new investors to get started in the stock market. They provide easy-to-use tools and automated services that take the guesswork out of investing. Plus, they don't require any prior knowledge or experience in finance and investments.
Are robo-advisors tax efficient?
Yes! Numerous robo-advisors provide tax-loss harvesting, a clever strategy for selling underperforming investments to offset taxable investment gains.
Can I customize my portfolio with a robo-advisor?
Absolutely! When setting up an account with a robo-advisor, you can create a personalized portfolio tailored to your unique investment needs and objectives. Many robo-advisors will ask questions about your risk tolerance, financial goals, timeline, etc., before suggesting an appropriate portfolio. You can also modify the suggested portfolio or craft your own from scratch.
What type of investor is a robo-advisor best suited for?
Robo-advisors are perfect for beginner investors who don't have the experience or the time to manage their portfolios. They can also be a great option for those who want to diversify their investments but don't have the resources to do so manually. Lastly, robo-advisors can be useful for making small, low-risk investments with minimal effort.
What are the benefits of using a robo-advisor?
Robo-advisors provide several advantages: they allow you to trade without human intervention, eliminating human bias from investment decisions. They also provide access to a wide range of investments, including various stocks and ETFs. Furthermore, robo-advisors are typically low-cost and offer automated portfolio rebalancing.
What are the risks associated with using a robo-advisor?
Robo-advisors use historical data, which may not predict future performance accurately. They also lack personalized advice, making it challenging to determine the suitability of recommended strategies. Additionally, limited customer service support and transparency regarding algorithms and methodology are common drawbacks with robo-advisors.
List of Robo-advisors – Advantages, Disadvantages & Fees
| Robo Advisor Name | Pros | Cons | Annual % Fee AUM From | Performance Details | Performance Rating |
|---|---|---|---|---|---|
| M1 Finance | ★ Commission Free automated investing. ★ Allows you to buy fractional shares of any stock or fund. ★ American accounts are insured up to $250,000 by Federal Deposit Insurance Corporation. ★ M1 Securities are insured for up to $500,000 by SIPC. ★ Military grade 4096-bit encryption and two-factor authentication for security. ★ Offers lines of credit. ★ Low minimum accounts balance of $100. | ✘ Focused on US customers Only. ✘ No hybrid advisors available. | 0% | M1 claims its funds offer a 9.87% rate of return. Typically within 2% of the comparative benchmark | ★★★★ Winner |
| Betterment | ★ Offers hybrid advisor services. ★ No minimum investment needed. ★ Offers a variety of products including Trust Accounts. ★ Special services like tax-loss harvesting and socially responsible investing available. ★ Focused on smaller investors. ★ Focuses on retirement. | ✘ Focuses on index funds rather than individual stocks. ✘ Could place some serious limits on investor choices and behavior. ✘ Claims to use “guardrails” to protect investors from themselves. ✘ No details of security arrangements available. | 0.25% | Betterment claims it offers 5% higher returns than the average US investor receives. | ★★★★ |
| Wealthfront | ★ 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 required. | ✘ No hybrid advisors available. ✘ No human financial planning advice available. ✘ Completely automated strategies. ✘ No details of security arrangements available. | 0.25% | Typically 1% lower than comparative Benchmark | ★★★★ |
| Vanguard Personal Advisor Services | ★ Offers both hybrid investors and robo advisors. ★ Clear fee schedule ★ Custom Financial Plans available. ★ Low Fees ★ Phone support available to US customers. | ✘ $50,000 minimum investment required. ✘ Charges higher than average fees. ✘ Owned by a mutual-fund operator. So Vanguard has an incentive to push mutual funds. ✘ No details of security arrangements available. | 0.30% + Fund Fees | Depends on the funds. However, Vanguard’ claims its US stock funds offer a 7.51% rate of return - in line with S&P 500 avg returns | ★★★★ |
| Schwab Intelligent Portfolios | ★ 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 re-balance accounts to lower risks. | ✘ $5,000 minimum investment required. ✘ Tax-loss harvesting only available on portfolios over $50,000. ✘ Schwab admits to making money off sales ETFs and other investment products. ✘ No details of security arrangements available. | ETF Fees | No comparison to the S&P available because of the variety of portfolios offered. | Not Available |
| Fidelity Go | ★ No Minimum balance 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 as little $10. | ✘ 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 available. ✘ No details of security arrangements available. | 0.35% + Fund Fees | No comparison to the S&P available because of the variety of portfolios offered. | Not Available |
| TD Ameritrade Essential Portfolios | ★ Hybrid advisors available through professional Portfolio Management. ★ Socially aware investing available. ★ Personalized portfolios available. ★ Free tax-loss harvesting on all accounts. | ✘ $5,000 minimum deposit required. ✘ No banking services or insured accounts available. ✘ No details of security arrangements available. | 0.30% | No comparison to the S&P available because of the variety of portfolios offered. | Not Available |
| Ellevest | ★ $0 Minimum investment ★ Claims to be designed by women for women. ★ Female CEO Sallie Krawcheck ★ Claims investment algorithms are designed for women. ★ No penalty for withdrawals. ★ Offers algorithms that are supposedly tailored for a customer’s salary, gender, and lifespan. ★ Some hybrid services available on all accounts. ★ Private wealth management services available. | ✘ Charges additional fees for hybrid advisory services. ✘ It is not clear if tax-loss harvesting is available. ✘ No details of security arrangements available. ✘ Does not reveal the actual costs of the private wealth management services. | 0.25% | No comparison to the S&P available because of the variety of portfolios offered. | Not Available |
| Robinhood | ★ Offers cryptocurrency investment. ★ Offers option and ETF investment. ★ Claims to be commission free. ★ Offers Stock Investment. ★ No minimum investment required. | ✘ No hybrid advisors offered. ✘ No details of security arrangements available. ✘ Robinhood shut down its cash management services in 2018 after critisicm accounts were not insured. ✘ Serious lack of transparency. ✘ Claims cash management services are coming soon | 0% | No comparison to the S&P available because of the variety of portfolios offered. | Not Available |
| Morgan Stanley Access Investing | ★ Offers a detailed investment plan. ★ Bases portfolios on an investors’ risk tolerance. ★ Algorithm runs thousands of simulations to forecast portfolio performance. ★ Hybrid advisors available. | ✘ Higher than average fee. ✘ $5,000 minimum investment required. ✘ Simulations could offer unrealistic pictures of market performance ✘ No details of security arrangements available. | 0.35% | No comparison to the S&P available because of the variety of portfolios offered. | Not Available |
