Robo-advisors are a popular way to invest, and it’s easy to understand why. They offer low-cost portfolio management that meets the needs of many investors, along with some extra features that are tough, if not impossible, for human advisors to match. In a short time, robo-advisors have acquired hundreds of billions of dollars in assets under management, and industry experts only expect their popularity with consumers to grow in the years ahead.
Here are the best robo-advisors to manage your money and how much they cost.
Here are the best robo-advisors in March 2024:
Betterment
Schwab Intelligent Portfolios
Wealthfront
Fidelity Go
Interactive Advisors
M1 Finance
SoFi Automated Investing
What is a robo-advisor?
The term robo-advisor sounds really high-tech, but it’s actually much simpler than you might think. A robo-advisor is a financial advisor that uses an algorithm to automatically select investments for you.
The investment choices are based on things such as:
How much risk you’re willing to bear
What level of returns you want
When you need the money
Based on these factors and others, the robo-advisor typically selects a portfolio of exchange-traded funds (ETFs) using sound investment theory. For example, the robo-advisor creates a diversified portfolio of ETFs, rather than just investing it all in one fund. Extensive research has shown that diversification reduces your risk and can actually increase your returns.
It’s simple to get started with a robo-advisor, and you can quickly set up an account online. And because it’s online and automated, robo-advisors are much cheaper than traditional in-person financial advice. Plus, you usually get some other cool benefits thrown in, too. Features such as portfolio rebalancing and tax-loss harvesting are typically offered, both of which should improve your returns over time.
Overview: Best robo-advisors in March 2024
Betterment
Betterment sets a high standard for service. It offers automatic rebalancing, tax-loss harvesting, a personalized retirement plan, a variety of portfolio options (such as impact investing) and fractional shares in funds, so that all your money is invested rather than having to wait until you have enough to buy a full share. You can sync outside accounts, too, and receive advice on them, while customer support is available seven days a week. Betterment’s premium plan ups the game with access to a human advisor.
Bankrate overall rating: 5 out of 5
Management fee: 0.25 percent – 0.4 percent, depending on service level
Account minimum: $0
Schwab Intelligent Portfolios
With Intelligent Portfolios, Charles Schwab is going after the robo-advisor market hard. Well-known for its investor-friendly practices, Schwab brings this same spirit to robos, with features such as rebalancing, automatic tax-loss harvesting and 24/7 access to U.S.-based customer service. And Schwab charges no management fee, so it’s worth saving up to meet the higher account minimum. If you want unlimited access to human advisors, you can get it if you bring $25,000 to the account and pay a $30 monthly fee – a real bargain for what you get. In fact, its easy-to-use interface and robust features earned Schwab Intelligent Portfolios a Bankrate Award for best robo-advisor.
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