The Best Robo Advisors (2017 Update) for Automated Investing

Here’s the thing.

Investing should be for everyone.

The introduction of robo-advisors has helped more people get into investing and save for their future without the costs of standard financial advisory services.

According to a BI Intelligence, “robo-advisors will manage around 10% of total global assets under management (AUM) by 2020. This equates to around $8 trillion.”

This is good news!

What is a Robo Advisor?

You may be asking, “what is a robo advisor?” Here’s what you need to know.

While there are different flavors of robo advisors, they all rely on technology and online portfolio management to reduce costs for the investor. For a small fee and sometimes no minimum initial investment you can receive professionally based portfolio recommendations in minutes.

Many of the technologies will automatically rebalance your investments when the time is right (a hassle for most people) and use tax harvesting strategies to reduce your tax liability. More than that, they provide user-friendly websites and mobile apps.

With that, check out our list of the best robo advisors to get a better idea of what’s available, their fees and more.

The Best Robo Advisors of 2017

BettermentBetterment – Based on your timeline, goals and risk tolerance, Betterment offers an automated service to build a customized investment portfolio. The founders created Betterment based on a desire for investment services that would deliver the best possible results while saving time and money. There is no minimum investment or balance requirements. Management fees are .15% to .35% depending on your balance. Invests in globally diversified low cost ETFs and has free tax lose harvesting for all accounts.

Get Started with Betterment (check out our full Betterment review)
TradeKingTradeKing Advisors – No minimum to open and no trade fees. Provides two managed portfolio options: Core and Momentum. Core is adjusted when needed to stay on track with goals. There is a .25% yearly advisor fee after the first year and minimum investment required of $5,000. Momentum responds to market changes and is reviewed monthly for new investments. There is a .5% yearly advisor fee after the first year and a $25,000 minimum investment.

Personal CapitalPersonal Capital – Offers free software that blends technology with financial advice. Has a mission to make investing services more accessible to people. More than investing, provides the ability to view your entire portfolio, cash flow management, portfolio tracking and even has a fee analyzer for your investments. Also provides a Wealth Management service to work directly with an Advisor. Minimum investment is $100,000 and fees are based on your assets under management and are billed monthly.

Rebalance IRARebalance IRA – A passive IRA investment strategy used to meet your retirement goals. Rebalance IRA recommends a portfolio and long-term plan and transforms your assets to meet this plan with your investment platform of choice (Fidelity, etc.). They handle the rebalancing of your portfolio as well.  The minimum size portfolio is $100,000. Fees are .5% per year and there is a one-time set up charge of $250 per account. Other fees include ETF fund fees of less than .2% and trading costs between $50 and $70 when rebalancing.

VanguardVanguard Personal Advisor Services – There’s a Vanguard Robo Advisor? Yes! Invest with Vanguard mutual funds and ETFs (certainly, not a bad thing), provides automatic rebalancing and more features. Fees are .3% annually based on account balance and there is a $50,000 minimum investment to get started. Vanguard quickly rose to the top of the heap of robo-advisors in terms of assets under management when rolling out their service in 2014.

Financial GuardFinancial Guard – Online investment advice and you don’t move your money. Simply link investment accounts and receive advice as well as transparency to hidden fees. The technology examines over 28,000 mutual funds and ETFs each month and assigns them a grade. The investing advice provides the reasons why they’re making the recommendations they do. Fees are $15.95 per month or $149.95 per year and is the same price regardless of the portfolio size.

LearnVestLearnVest – An online dedicated financial planner service that provides a personalized plan and the tools to implement it. LearnVest doesn’t hold assets or place trades. There planners make recommendations you then execute yourselves. Their mission is to provide affordable, accessible and delightful financial planning services. Fees are $299 up front and $19 per month thereafter.

Charles SchwabSchwab Intelligent Portfolios – An automated investment advisory service that builds and rebalances your portfolio. Minimum investment is $5000 and there are no advisory fees or account service fees. Invests in a diversified portfolio composed of ETFs handpicked by the CSIA team. Tax loss harvesting is available to clients with $50,000 or more invested.

FutureAdvisorFutureAdvisor – Online financial advisor and investing advice service that provides automated investing, rebalancing and tax loss harvesting.  Offers three services: Free DIY investing, automated investing and rebalancing (.5% management fee) and free investment management service for educational accounts like 529s, Coverdells and UTMAs. New accounts have a $10,000 minimum initial deposit. Invests in low fee and commission free ETFs and seeks a passive long-term return strategy.

Motif InvestingMotif Investing – Makes it easy and cost effective to invest in ideas. An investor can choose from over 150 professionally built portfolios or from 55,000 in the Motif community. Each motif can be customized to meet your needs and there are no monthly fees. Motif costs $9.95 to purchase a portfolio of up to 30 stocks or ETFs and you can get started with as little as $250.

MarketRidersMarketRiders – Web-based investment management software to build a globally diversified low-cost retirement portfolio. Works with any brokerage. Fees are $12.95 per month and provides recommendations on what to buy. Your portfolio is based on 6 asset classes that aligns with different ETFs. You’ll receive alerts and provides guidance when it’s time to rebalance.

SigFigSigFig – Creates a portfolio based on your goals and keeps it balanced and diversified. Annual fee of .25% for SigFig managed account and $2000 is minimum amount required to get started. ETFs are purchased through Fidelity, Charles Schwab and Ameritrade brokerages. Their investment philosophy is to decrease investment risk while using low cost funds.

WealthFrontWealthfront – Automated investing service that does all the management and rebalances for you. Strategy includes investing in ETFs that track indexes for 11 major asset classes. The minimum investment amount is $5000. Accounts are held with Apex Clearing Corporation. There are no fees on the first $10,000 and amounts over are charged a monthly fee based on annual fee rate of .25%.  Minimal ETF trading fees are in addition.

WiseBanyonWiseBanyan – Believes investing is a right and not a privilege and people should be able to invest for free. Money is invested into a selection of stocks and bonds through ETFs. There are no fees based on account size. There is also no minimum investment amount required! WiseBanyan earns their money based on the products and services you choose that meet your needs.

WorthFM – An all-digital, low-cost, and comprehensive financial management service, WorthFM was created by women for women (although anyone is welcome to invest with them). The advisor offers five low-fee portfolios designed to balance risk and return. Each portfolio is made up of a mix of up to 8 ETFs. You can get started with WorthFM with as little as $50. Fees are $2 per month or 0.5% per year, when your investing and retirement accounts are $5,000 or more. WorthFM is not yet up and running, but interested investors can get on their wait list for early access.

 OnTrajectoryA financial planning and advising application. It allows you to enter in your current financial plan and see if you are on track for your future financial goals. You can create goals and adjust your current contributions to see the difference it will make in your net worth. The program is listed as free but you can only enter in a certain amount of accounts and incomes. If you are married or have multiple streams of income you will want to upgrade your plan to $3 per month or $30 per year. This program is great for forecasting how simple adjustments in your spending habits can make a large impact on your future.

Compare the Top Robo Advisors of 2017

Robo-Advisor
Fees
Minimum Investment
Reviews
Betterment
.15% to .35% annually depending on balance
None
“SignFull Review
TradeKing Advisors
.25% to .5% depending on investment program
$5000 or $25,000
“SignFull Review
Personal Capital
Dependent upon assets under management. .49% to .89%
$100,000
“SignFull Review
Rebalance IRA
.5% per year, one time set up fee of $250 and trading fees
$100,000
“SignFull Review
Vanguard Personal Advisor Services
.3% per year
$50,000
“SignFull Review
Financial Guard Services
$15.95 per month or $149.95 per year
$1000
“SignFull Review
LearnVest
$299 up front and $19 per month
None
“SignFull Review
Schwab Intelligent Portfolios
None
$5000
“SignFull Review
FutureAdvisor
.5% per year
$3000 minimum deposit.
“SignFull Review
Motif Investing
$9.95 to purchase a portfolio of up to 30 stocks or ETFs
$250
“SignFull Review
MarketRiders
$12.95 per month
None
“SignFull Review
SigFig
Under $10,000 free and over is .25% of investment
$2000 is minimum
“SignFull Review
Wealthfront
No fees under $10,000. Over $10,000, monthly fee of .25%/12
$5000 is minimum
“SignFull Review
WiseBanyan
No fees based on account size
None
“SignFull Review
OnTrajectory
$3 per month or $30 per year
None
“SignFull Review

While the concept and investment strategies (and thus, performance) are very similar across robo advisors, they’re not all the same as far as fees, minimum investments and level of service for investing. Therefore, we highly recommend you spend some time investigating on your own.

That’s why we created this handy table to get you started. Just follow each link for the robo-advisors that interest you the most and learn more at their website.

Don’t forget to read our more in-depth reviews where available. Also, if you’re using a robo-advisor today, be sure to share your experience in the comments.

Should I Use a Robo Advisor?

At this point you may be asking, “should I use a robo advisor?” I answered this question for myself by answering two other questions:

  1. Do I believe in the idea of low-cost, diversified, long-term investing vs actively managed investing? Yes, I do. If you believe in this too (meaning, you think this approach is going to give you the best chance at long-term investing success), then a robo advisor may be for you. But you then have to ask yourself a second question…
  2. Do I want to outsource the picking of those low-cost funds and rebalancing the asset allocation through the years? I said no to this question. Sort of. I chose to pick my own funds over at Vanguard. And the single fund I chose was VFORX, which is a target date fund (made up of 3 index funds) that automatically balances itself as I get older.

So in essence, I decided that it wasn’t worth the additional cost of a robo advisor to pick funds for me.

I do, however, still use a robo advisor, Betterment, as an emergency fund overflow account. When my emergency fund (in a simple savings account) reaches a certain limit ($10k), Betterment pulls the overflow money into their account. This is called SmartDeposit and you can read more about it in my full review of Betterment.

Robo Advisors vs Financial Advisors

The introduction of robo-advisors has helped more people get into investing and save for their future without the costs of standard financial advisory services. Here are the best robo advisorsOne last question you might have is, “what’s better? robo advisors vs financial advisors?” And to that question I say…you don’t have to choose. You can use both. I plan on using both in my life to achieve financial success.

“Robo advisor” is such an unfortunate name for these tools. It makes it sound like you don’t need another human to help you make financial decisions. That’s just not accurate. It should be named robo investor or robo trader.

A financial advisor can do much more for you: help you get rid of debt, teach you to properly manage your money, advise you on insurance, social security, estate planning, and the list goes on.

In fact, many financial advisors are using robo advisor software now to actually manage your specific investments for you. So even if you try to choose one over the other, you may eventually end up using both anyway.

I personally use a financial advisor every five years or so in a one-off meeting to check my progress towards my goals. I pay a one-time fee.

Got an opinion on Robo Advisors? Let us hear from you in the comments below.

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Last Edited: April 6, 2017 @ 12:40 pmThe content of ptmoney.com is for general information purposes only and does not constitute professional advice. Visitors to ptmoney.com should not act upon the content or information without first seeking appropriate professional advice. In accordance with the latest FTC guidelines, we declare that we have a financial relationship with every company mentioned on this site.
About Jason Price

Husband, dad and financial ministry leader on the journey to true financial freedom. Learn more about Jason here, follow him on Twitter or read more of his articles at PT Money.