Affiliate Disclosure: Some of the links on this page are affiliate links, which means we may receive a commission if you decide to buy a product or service we recommend.
If you plan to invest quickly and have more time for yourself, leveraging the best robo-advisors for 2023 is the way to go.
With robo-advisors, you can enjoy the highest possible yield with their advanced algorithms without worrying about extra cost and energy.
First launched in 2008, Robo-advisors are becoming increasingly popular with investors, especially in a growing technological society, and they’re expected to increase even further in the future.
I’ve reviewed some of the top Robo-advisors and ranked them according to their fees and features.
Read on and see what’s the best robo-advisor for you.
What Is a Robo Advisor?
Robo advisors are one of the key technological advancements being looked forward to by investors and financial advisory firms.
They’re financial advising software that uses advanced algorithms to help individuals gain the highest potential investment returns.
It can customize your portfolio according to your goals and risk levels preferred with little to no human supervision. It is a very convenient tool that won’t take too much of your time and effort to sign up or cost you its actual usage.
Because of the pandemic, the economy’s decline had investors continuously buy stocks, bonds, and other investments to gain maximum profit when everything bounces back together.
Since handling investments on your own involves a lot of time, energy, and effort, it may be hard to keep up with the market’s volatility. Plus, paying a financial advisor may be costly and not practical.
Often, you can access Robo-advisors through your smartphones. The primary reason behind this technology is to create a low-cost but trustworthy investment advising platform.
Robo-advisors make the investment very easy and undemanding.
How Robo-advisors Work?
Launched during the 2008 recession, robo-advisors provide an accurate algorithm that adjusts to the risks and goals of each investor. It creates a well-curated portfolio based on investor preferences.
They let you enjoy more time to yourself and save more or less the cost you pay for having a financial advisor.
The best part is they offer less interaction between you and your investments.
Robo-advisors operate in a manner that will automatically adjust to the market’s volatility.
Their massive rise to fame was made possible by the economic recession and the growing interest in easy investing.
Robo-advisors use easily accessible investment customization to create a well-rounded investment portfolio.
While using algorithms, Robo-advisors continuously monitor your portfolio. They adjust to the risks and levels of the market to give you a maximized profit.
While this technology makes everything much more affordable for people, it also makes everything more efficient and seamless.
Now that you know what Robo-advisors are and what they can offer you, browse the list I’ve compiled below. This list contains some of the best Robo-advisors for 2021, backed by research to help save you time.
Best Robo Advisors for 2021
1. SoFi Automated Investing
Sofi Automated Investing, previously known as Sofi Wealth, is a booming robo-advisor that offers an all-in-one investing platform.
It has had no management fees since it first launched in 2018. It offers low-cost ETFs and high-yield treasury bonds with possible high yields.
Sofi has automatic rebalancing for your portfolios and monitors daily for target adjustments. Automated Investing stands out by offering readily available financial advice.
You’re entitled to a free financial consultation with no extra charges.
Like most Robo-advisors, Sofi Automated Investing offers a high-interest savings account.
It has no account fees with ATM fee reimbursements every month as well. All of Sofi’s features make it an attractive Robo-advisor not just for starters but as well as seasoned investors.
Pros:
- Free of commission fees.
- It offers goal planning, auto-rebalancing, and portfolio diversification.
- It has a minimum of $1 investment requirement. You don’t have to start with large amounts to invest.
Cons:
- It offers limited account types, which also means less portfolio diversification.
- It doesn’t have a tax-loss harvesting feature, so you might have to do this manually or have a human financial advisor’s support.
- More expensive account closing fee of $75 compared to its competitors.
Account Minimum: $0
Fees: None
Promotion: Free career counseling plus loan discounts with a qualifying deposit.
2. Fidelity Go®
Fidelity Go® robo-advisor is another efficient and easily accessible Robo-advisor.
It was founded by an online broker company called Fidelity Investments, a specialist in the digital investing platform.
Fidelity Go® helps build investment portfolios, and behind it is the hybrid integration of human experts and computer algorithms.
This software uses the Fidelity Flex mutual funds in curating investor portfolios. It is an ideal software for investors with below $10,000 investment funds, as the company offers no charges for this range of investment amounts.
Fidelity Go® also rebalances portfolios and is a brilliant choice if you are worried about having a pure algorithm manage your investments.
Customers can also benefit from Fidelity Go®’s high-interest rates on cash and high-yield strategies. However, this robo-advisor only allows cash funding and no transfers of securities.
Overall, this robo-advisor can be most beneficial for investors with existing Fidelity accounts because they can altogether be integrated.
Pros:
- It offers goal planning, auto-rebalancing, and portfolio diversification.
- It is free for investments below $10,000.
- It integrates the use of robo-advisor algorithms with human, financial advising.
- It is integrated with existing Fidelity accounts.
- It offers higher interest rates for cash accounts.
Cons:
- Despite offering a highly integrated and hybrid robo-advisor, it does not offer human financial advisor support to its customers.
- It does not have a tax loss harvesting option. Another key feature that is not supported by this software might need financial advisors or your research interference.
Account Minimum: $0
Fees: $0-$3 per month or .35 annually
Promotion: None.
3. Stash
Stash Robo-advisor software aims to make investing easier and more accessible.
It is mainly designed for first-time users and has a smart portfolio, where your preferences are managed and optimized accordingly.
Just like Fidelity Go®, Stash is an integration between software and the oversight of human financial professionals from the Stash Investment Committee itself.
It was also built for long-term (unlike other Robo-advisors) and diversified investment management.
Stash uses a transactional approach to risk profiling strategies to make it even more efficient and effective for each investor.
While it may have higher fees than some of its competitors, Stash offers a program that can endure and last long despite the volatility of the market.
Unlike other Robo-advisors, this app does not miss out on educating its investors and providing their needed support.
If you are looking for a low-maintenance app and have thoughts about investing for the first time, then Stash may be an excellent choice for you.
Pros:
- Easily set up and accessed an investing account platform.
- Integrates complex robo-advisor algorithms with skilled financial professionals.
- Offers customer support and educates investors, especially beginners.
- Great long-term robo-advisor choice.
- It has value-based investment choices.
Cons:
- Unfortunately again, this software does not offer tax-loss harvesting support hence, the need to exert more effort in this area.
- It offers high ETF expense ratios.
- Offers higher fees compared to competitors.
Account Minimum: $0
Fees: $1-$9 per month.
Perk: $5-$40 Bonus.
4. Ally Invest
One of the highly ranked robo-advisors is Ally Invest, which significantly offers a low-cost portfolio managing tool.
Ally Invest helps investors curate a dynamic portfolio without having to worry about fees at all.
It also supports stocks, mutual funds, bonds, and ETFs, hence offering a very diversified portfolio and investing platform.
Though this robo-advisor does not have integrated features, it has a pain-free support system.
Like any other robo-advisors, Ally Invest offers an easy signing-up process that can take as fast as 10 minutes. It also has readily available explanations to guide you through your application.
Ally Invest’s minimum investment requirements and fees are not at all a problem, as it is relatively cheaper than most of its competitors.
Other than it has rebalancing features that automatically set up your portfolio. It also has retirement goals and multiple account options.
Pros:
- 24/7 live chat and telephone support are offered to its customers.
- It charges a $0 advisory fee and a minimum of $100 trading startup.
- Easily set up and access an investing account platform.
- Diverse investment options from ETFs to mutual funds, bonds, stocks, etc.
- Also offers auto-rebalancing, goal planning, and portfolio diversification.
Cons:
- It does not offer financial advisor support.
- It has no tax-loss harvesting support either.
- Charges transaction fees.
Account Minimum: $0
Fees: $0
Perk: $3,500 in bonus cash.
5. Betterment
Probably one of the most popular Robo-advisors today, Betterment is definitely on top of its game.
Besides offering general features such as portfolio diversification, auto-rebalancing, and goal planning, it also democratizes complex and expensive access to starting an investment.
Some financial sites and advisors even see this as one of the best robo-advisors currently available.
Betterment is designed not just to configure portfolios but also integrate tax strategies and goal-oriented tools that investors will surely benefit from.
While it offers a free account, it also has a premium account where you can access its hybrid financial advising platform without the interference of finance professionals.
This robo-advisor offers tax-loss harvesting, which is a rare feature as far as this list goes. It has a very diversified 13 asset ETF classes your portfolio can explore.
And last but not least, is that it offers high-yield savings accounts free of any charge.
How cool is that, right?
Pros:
- It has a tax-loss harvesting feature that most of its competitors do not offer.
- It has high customization options.
- Offers auto-rebalancing, goal planning, and financial advice on its premium account.
- Robust goal-oriented tools with little to no fees at all.
- Betterment is a well-known robo-advisor advent that made a long way in the investment list and is a trustworthy and reliable choice.
Cons:
- Unlike some robo-advisors, betterment does not have a direct indexing tool still helpful in its tax-loss harvesting tool.
Account Minimum: $0
Fees: .25%
Promotion: 12 months of free service with an initial deposit of at least $15,000.
6. WiseBanyan
Another promising Robo-advisor is the WiseBanyan software.
This software does not charge annual fees for its taxable accounts, hence its slogan as the first “free financial advisor” in digital form.
While provoking free services, you can also get started investing with a minimum $1 fee.
It offers basic robo-advisor features such as portfolio diversification, automatic rebalancing, and goal planning.
It also helps its clients through its finance experts integrated into the system or accessed via personal support. WiseBayan is also a trustworthy robo-advisor, having a two-factor authentication feature.
Besides these innovative and free features, you can also open your WiseBanyan account and apply for your investment quickly and easily.
WiseBanyan generates recommended portfolios according to your preferences, and Voila, you’re ready to go.
Pros:
- It offers goal planning, auto-rebalancing, and portfolio diversification.
- No fee charges or free services.
- Offers tax-loss harvesting tool.
- Offers a two-factor authentication
Cons:
- It does not offer in-app customer service but has phone and email support.
- It has a termination fee and an account minimum.
- It has a limited account selection.
Account Minimum: $1
Fees: $0
Promotion: None.
7. Ellevest
This unique robo advisor empowers women and debunks gender stereotypes in investing.
It’s mainly designed to encourage women to invest and consider their future financial goals.
Ellevest is a Robo-advisor that has a lot of features beneficial to its investors, particularly women.
Like other Robo-advisors, Ellevest offers portfolio optimization, auto-rebalancing, and goal planning. It welcomes clients of all gender and is not exclusive to women.
With as little as $1 per month, you can start an investment plan with free financial learning and coaching.
Since the rise of investment apps, men have grown more and more dominant in the financial sphere, and Ellevest wants to make sure that regardless of gender, everyone is empowered to make their investments.
It focuses on achieving its client goals rather than only focusing on the highs of the market.
Pros:
- It offers goal planning, auto-rebalancing, and portfolio diversification.
- Affordable plans and fees.
- Diversified in portfolio curation.
- It has additional goal tools.
Cons:
- No offer of tax-loss harvesting tools.
- Its extra benefits may charge additional fees.
- There are no joint accounts offered, only individual accounts.
Account Minimum: $0
Fees: $1-$9 per month
Promotion: 2 months free.
8. Acorns
Acorns is a great Robo-advisor for beginners, especially if you have no experience or background in investing at all.
This platform offers an automated saving experience and makes the investing look and feel easier.
It automatically makes use of your spare change from its savings tool and invests your money in ETFs.
Acorn offers portfolio diversification, auto-rebalancing, and goal planning.
Additionally, it offers cashback rewards with its partner stores, a feature that some competitors do not offer.
To make it all the easier for its users, it has an educational embedded content every step of the way.
Though this investment tool is not as highly organized to be a full-time robo-advisor, it does the job and offers more rewards and tools to benefit its users.
You can also connect your cards with this tool, which most robo-advisors do not offer. If you opt for an essential savings slash investment tool that is undemanding, then Acorn is the well-rounded app for that.
Pros:
- It has cash-back rewards programs and a savings tool.
- It has a cheap annual fee compared to its competitors.
- Low cost with a $0 account minimum.
- Easy to use and has educational resources for its first-time users.
- It offers portfolio diversification, auto-rebalancing, and goal planning.
Cons:
- It does not offer accessible human advisors as well; hence fully automated.
- Like many other Robo-advisors, it does not offer a tax-loss harvesting tool.
- It also does not have an SRI portfolio option.
Account Minimum: $0
Fees: $1-$5 per month
Promotion: $10 Sign Up Bonus.
9. E*Trade
E*Trade offers low cost with hands-off and high-yield investment gains.
But that’s not all.
E*Trade also offers automatic rebalancing for your portfolio and monitors it daily for target adjustments.
Not only does it educate its investors, but it also updates and continuously offers impactful financial information to help its clients.
Like other robo-advisors, E*Trade analyzes your data and chooses the level of risk for your portfolio.
And another prominent feature of this software is that it has a competitive customer support tool.
Besides its education library, it has a team of financial expert representatives to guide and help you along the way.
From building your portfolio from scratch to monitoring it automatically, E*Trade is surely a great option for every investor out there.
Pros:
- It has extensive educational resources.
- It has great customer support.
- It is free of commission fee.
- It offers automatic rebalancing and monitors daily for target adjustments.
Cons:
- It offers limited account types.
- It doesn’t have a tax-loss harvesting feature.
Account Minimum: $0
Fees: $0
Promotion: None.
10. Wealthfront
Wealthfront, one of the best among robo-advisors from the list, offers a high-yield and well-curated investment portfolio.
This software makes investing competitive not just with other platforms but against the market volatility itself.
It also offers a competitive management fee and has one of the best tax-loss harvesting tools on the list.
Wealthfront’s investment strategy paired with its daily tax-loss harvesting tool puts it on another level.
Additionally, it offers above-average investment covers from local to foreign stocks, government, treasury, municipal bonds, real estate, and many others.
You’re able to link your bank to pay the $5000 managed fee flexibly.
Despite its high management fee, the features of Wealthfront make it a brilliant choice and indeed beneficial for your long-term investment goals.
Pros:
- It offers a daily tax-loss harvesting tool.
- It has goal planning and setting as most Robo-advisors have.
- It offers automatic rebalancing and also monitors daily for target adjustments.
- It has a significantly higher yield per annum because of its level of diversity.
- It offers a line of credit and a savings plan.
Cons
- It’s a risk parity fund.
- It’s a costly account minimum and management fee.
Account Minimum: $500
Fees: .25%
Promotion: $5000 managed for free.
Valuable Features of Robo Advisors to Look For
Low Fees
Robo advisors help build your portfolio and manage it on autopilot at a low cost.
Because a bulk of the process is automated, companies save money traditional portfolio management companies incur. Such as rent, employee expenses, etc.
Why does this matter?
Well, because companies are able to save money they have the ability to pass these savings on to you!
Minimum Deposit Requirements
If you want to invest but don’t have that much starting investment budget yet, then opting for a Robo-advisor is your best bet.
It’s an ideal place to invest in smaller amounts, especially when you’re only starting.
Some Robo advisors even feature a $0 minimum deposit, but of course, they need a certain amount to trade.
Long are the days when you’d need $1,000-$10,000 to invest in the stock market.
Overall, the minimum deposit requirements for robo-advisors are as flexible as they can be in any other investment platform available.
Automatic Rebalancing
In the investment market, automatic rebalancing is the process of automatically evaluating a portfolio.
This is to ensure that it is holistically still aligned with the investor’s financial goals and preferences.
Why does this matter?
Well, if you invest 90% of your money in stocks and 10% in bonds, this will change over time naturally.
This is mainly because your money earns interest.
For example, if your stocks earn 7% annually and your bond only yield 1% annually, your portfolio will eventually be consumed by a higher percentage of stocks than you’d initially started with.
A Robo-advisor with the use of complex algorithms curates and continuously checks your portfolio for rebalancing.
Buying or selling assets between different investments are very efficient when done by robo-advisors. It targets specific goals according to the investor’s preferences.
So, as an investor, your portfolio might dynamically be changed by a Robo-advisor; these changes are only targeted toward your goals.
Tax Loss Harvesting
Tax-loss harvesting in the traditional form requires not only time; it also requires cost, as it needs more financial advising effort and monitoring.
With the use of Robo-advisors, tax-loss harvesting has never been easier and more convenient.
Tax-loss harvesting or tax selling can help an investor’s portfolio be more tax efficient.
Robo-advisors help investors sell low-performing index funds and convert them into taxable incomes or gains.
This potentially lowers the amount of taxes you pay and turns it into a positive return.
How cool is that?
Access to Human Financial Advisors
Robo-advisors, though misleading by their name, are not robots.
They are software that gives investment managing platforms. by leveraging algorithms to curate the best possible portfolio for its investor.
Though there are some speculations that Robo-advisors may seem like a threat to humans, financial advisors, and firms, this is not the case.
In fact, human interaction will always be necessary, which is why some portfolio management companies still offer a human advisor to supplement their Robo-advisor service.
Customer Support
Up to some extent, Robo-advisors offer readily accessible and prompt customer service.
They usually have built-in app chat support or call support backed by customer service representatives knowledgeable of the app.
Their customer support varies according to the Robo-advisor company you sign up for.
Additionally, Robo advisors offer an easy account setup compared to manual investment portfolio building.
Their customer support includes branch access but in-app and remote access.
This key feature for investors’ ease of access is something that makes Robo-advisors a great tool.
You can sync accounts, and ask for financial advice and human intervention.
And they provide a place for customers to access reviews, comments, and FAQs.
This reduces costs without cutting down on its customer engagement features.
What Does It Cost to Use a Robo Advisor?
By now you know Robo-advisors cost less than a traditional financial advisor.
Most robo-advisors have a management fee of around 0.25% annually. This is where they earn money to run the whole thing.
Despite the low management fee of Robo-advisors, the investment expenses have flexible benchmarks that adapt to your preferences. With as little as $5000 and as big as millions of dollars, you can start investing with a Robo-advisor of your choice.
To some people, investment fees may seem like an insignificant part of any investment.
After all, what impact does it have when compared to the annual returns? It’s hard to avoid investment fees.
Mostly, these fees are automatically deducted from your returns, making them easy to ignore.
However, it is always important to know what and how much the charges are costing your investments.
Compare the fees, review the services and make sure you’ve researched the fees that robo-advisors, or any advisors, for that matter, offer.
Investment methods come in different costs and sizes; one way about determining their actual overall returns is by assessing their costs hidden or not.
Is a Robo Advisor Right for You?
Though robo-advisors may seem like a hyped-up concept because of the growing demand for technology, it has bragging rights.
In such a low time for the market, investors are getting an itch towards having more investments.
And with more investments come more significant risks, energy, time, money, and effort, which makes Robo-advisors an excellent choice.
If you’re willing to educate yourself on the basics of investing, you should be able to build your own custom index portfolio.
There’re even experts online willing to help you for free in reputable forums.
However, if you’re not willing to do the work Robo-advisors are a great option.
Where Robo-advisors Fall Short
The truth is, despite all the great features Robo-advisors offer, they also have their downside.
For example, since Robo-advisors apply the same investment strategy for portfolio sizes, not all investors are going to receive maximized returns.
Along those lines, robo-advisors may not provide the maximum investing knowledge that a human financial advisor can give.
Since they’re designed for an easy investing process, the complicated tasks and details are not provided to the investor in-depth.
And of course, it also can not express emotions and human insights if you ever need it in balancing practical judgments for your investments.
If you fit in the following categories, robo-advisors may be for you:
New Investors
Most robo-advisors are also designed to offer accessible features and hassle-free forms you can quickly fill out using your gadgets.
You don’t have to read a book full of investment guides nor pay for someone to explain it to you; Robo-advisors could do all the jobs for you.
Hands off Investors
Robo-advisors automate our lives and help us even on our most mundane day-to-day tasks.
And now that we are fast approaching a more technological age, Robo-advisors use algorithms to help ease our worries.
Tax Breaks
If you’re concerned about optimizing your money when investing a large sum, many Robo-advisors have tax-loss harvesting features to achieve this with low fees quickly.
Robo Advisors Are the Best Solution for Handling Your Investments
Overall, Robo-advisors automate and seamlessly do the job.
So if you are wondering whether a Robo-advisor is right for you, the answer is most likely yes—but like all things, up to some extent.
You should still do your research and understand what you’re paying for.
Best of all, Robo-advisors can help you invest for your long-term saving goals while you focus on other financial strategies to build wealth and reach financial freedom!
Your journey to financial freedom will be one full of bumps along the way.
However, innovative tools like Robo-advisors give you the power to invest for your financial future.
Now go earn some compound interest!
How I Choose Robo Advisors
To evaluate the best Robo-advisors for 2021, I tested the following companies: Betterment, Vanguard, Sofi, Fidelity, Stash, Ally Invest, WiseBanyan, Ellevest, Acorns, eTrade, Wealthfront, Blooom, SigFig, Axos, Wealthsimple, Charles Schwab, M1 Finance, FutureAdvisor, and Personal Capital.
The score for the overall weighted average was tested according to; fees, minimum deposit requirements, customer service, features (i.e., tax harvesting), and security.
FAQS
Are Robo Advisors Good?
Managing your finances, especially your investments, demands time and effort.
The solution?
Robo-advisors.
They’re an excellent tool for managing your investments while helping you save costs and energy.
Robo-advisors can achieve this mainly because of their automated features.
This removes the need for rent, human advisors, etc.
If you want someone or something to manage your investments and give you a variety of returns that typical financial advisors can’t give, then a Robo-advisor is your go-to.
Are Robo Advisors Worth It?
If you are looking for accurate and dependable investment goals, Robo-advisors are worth it.
Their atomization features allow you to enjoy your life without having to worry about market volatility your portfolio is well-managed.
Robo-advisor key features include auto-rebalancing, tax-harvesting, and low management fees.
Their unique features make them a top-notch choice for millennial investors.
How Should You Choose a Robo Advisor?
Choosing a Robo-advisor is almost the same as choosing your own trusted human financial advisor.
Before choosing a Robo-advisor, set your investing goals.
What type of investments are you comfortable investing in? What type of customer support would you like?
These are some of the questions you should ask yourself before choosing any advisor.
Next, consider the fees.
Although Robo-advisors are not as expensive as traditional financial advising options, fees are still needed to consider.
There’s no “best” Robo-advisor as they all have unique features.
And to find your perfect Robo-advisor begin with the end in mind.
Do Robo Advisors Beat the Market?
While robo-advisors use advanced algorithms to custom the slightest potential risk with high return, it is still significantly improbable to beat a very volatile market.
The index funds that most robo-advisors typically invest in have a low possibility of ever beating the market.
Despite this, they can still outperform the traditional investment methods and have lower chances of underperforming the market.
Are Robo Advisors Safe?
Robo advisors are safe up to some extent of investment amounts.
For entry-level investors, it is ideally great, but for six or more-digit investors, it can be risky because their low cost also means a low threshold.
Additionally, Robo-advisor companies encrypt your data to ensure it’s secure.
Though they haven’t been around for long enough, Robo-advisors are here to stay and will surely keep improving.
Will Robo Advisors Replace Financial Advisors?
Clearly, behind any technology, there will always be a human element involved.
Though the future is leaning forward toward the ease of technology, Robo-advisors will not replace human financial advisors since they are crucial in making sound financial decisions.
This is why many Robo-Advisors like Fidelity Go offer human financial advisor support.
Can Robo Advisors Make You Money?
Robo-advisors charge a minimal fee and help you earn higher interest than traditional investments.
Simply put, Robo-advisors will help you make money.
They’re a great option for you to choose from if you’re a new investor.
