Best Robo Advisors of 2020
It used to be extremely expensive to get your investment portfolio managed, but thanks to technology and robo advisors, many of the features and services once reserved for the rich are increasingly available to everyone.
Robo advisors are simply algorithms that manage your portfolio to ensure that your money is invested efficiently, all while helping you minimize your risk and taxes while maximizing your rewards.
Advanced algorithmic trading has existed on the stock market for a long time, and several financial companies have created tools for regular investors to step in on the growth opportunity.
Depending on your level of commitment, funds, and desired outcome, there are now many robo advisors to choose from.
13 Best Robo Advisors of 2020
Here are the 13 best robo advisors of 2020:
- M1 Finance
- Personal Capital
- Ally Invest
- Sofi Invest
- Vanguard Personal Advisor
- Charles Schwab
M1 Finance can offer investors the best of both worlds: a full-service robo-advisor with no management fees.
That’s right. M1 Finance does not charge management fees to invest your money or auto-balance your portfolio.
You don’t even need a minimum balance to open an account, though M1 will wait until you have $100 in your account before beginning to invest. And, accounts with less than $20 for 90 days are subject to fees.
Even though the service is free, M1 Finance is not a discount or light-weight option for robo-advising. You’ll have access to plenty of features, including a graphic-first interface.
You can set up a retirement or taxable account, invest in single stocks or ETF shares, and even invest in fractional shares to keep more of your money in the market.
M1 does lack a few peripheral features some users may like such as access to a human financial advisor and the ability to import data from your other accounts which would place your investments in context.
Plus, customer support is available only by phone or email and only during business hours (Central time).
- Fees: None unless you use M1 Borrow (a lending service) or let your account fall below $20.
- Benefits: More than 80 existing investment strategies to use; plus you can customize your own strategy.
Betterment was one of the first robo advisors and has grown into one of the largest based on assets under management. Their investing platform is incredibly intuitive and designed to make investing simple and intuitive.
I personally invested with Betterment for over a year and wrote about my experience in a Betterment review.
While I decided to make the switch to Vanguard (see Betterment vs. Vanguard), Betterment is a great option for both beginning and experienced investors who want a best in class robo advisor.
Betterment features include 7-day customer service, personalized, goal-based retirement planning; and the premium service gives access to a financial advisor. Betterment also offers a high interest savings account called Betterment Everyday™.
- Fees: 0.25% digital service, 0.4% premium service, No account minimum.
- Benefits: Betterment portfolios automatically rebalance to prevent top-heavy investments, have tax-loss harvesting in non-retirement accounts, account syncing, and fractional share buying to increase investment load with available capital.
Wealthsimple started in Canada and currently has over $5 billion Canadian Dollars under management. But Wealthsimple is now also available in the United States, as well as other countries, although not all features are available in every country.
One of the biggest benefits of working with Wealthsimple is their customizable portfolios, custom portfolio reviews, and the opportunity to create a values-based portfolio.
While their fees are higher than Betterment and Wealthfront, they don’t have a minimum investment and also offer more opportunities for socially responsible and halal investing.
- Fees: .5% below $99,999, .4% above, on minimum
- Benefit: Wealthsimple save offers high 1.93% yield
To learn more check out our detailed Wealthsimple review.
Personal Capital created the best free money tool in the United States and I’ve been using it for the past 5 years to track my net-worth, expenses, and investment portfolio. If you aren’t using Personal Capital’s free tool you should definitely sign up here.
While the tool is completely free to use and includes investing portfolio recommendations, Personal Capital is also a robo advisor, which combines algorithmic trading with the support of a financial advisor.
While their fees are a bit higher than Betterment, Personal Capital has more advanced tax optimization features, which, which might be worth it to you.
- Fees: 0.49%-0.89% up to $1 million, $100,000 minimum
- Benefits: App support, Advanced Tax optimization
To learn more check out our detailed Personal Capital review.
Acorns is a micro-investing app that rounds up your purchases to the nearest dollar and then invests the money. For example, if you buy a cup of coffee for $2.75 then the app would invest $0.25.
Acorns does this every time you buy anything, so you’re able to invest money without having to think about it. I’ve been using Acorns for a couple of years and the money definitely adds up quickly.
It’s different than a traditional robo advisor because it’s less geared toward saving for retirement and more focused on saving a smaller amount of money for an emergency fund or trip.
It’s a great first step if you haven’t started saving or investing, or if you are investing and just to add a little bit more money to your investments without having to think about it. Good for beginning investors in Robo Advising.
- Fees: $1-$3 per month at $5 minimum
- Benefit: Students receive free accounts until the age of 24.
To learn more check out our detailed Acorns review.
Ally Invest offers a wide range of investing tools for every level of investor. Whether you simply want to buy stocks or bonds, or get help with your portfolio, Ally has you covered.
One of the areas where Ally excels is in their user experience. All of their investing and banking products are extremely intuitive and easy to use, including their robo advisor offering.
I’ve been an Ally Bank customer for the past 7 years and they also have great customer service, where they don’t try to sell you anything.
- Fees: 0.0% at $100 minimum, $3.95 per trade at 30 trades per quarter and a balance of $100,000
- Benefit: Integrates with Ally Bank and their high yield savings account brokerage accounts, can combine with a managed account, trading account, and bank account.
SoFi Invest – Automated Investing
SoFi used to be a student loan refinance company, but they’ve recently expanding their offerings to include SoFi Invest, where you can buy individual stocks or invest through their Automated Investing robo advisor.
SoFi Automated Investing gives you all the features of a more expensive robo advisor with no minimum investment.
These features include goal planning (where you can set life goals and get recommendations for how to best save for them), automatic portfolio rebalancing (so you can make sure you stock/bond asset allocation is maintained), as well as help building a diversified portfolio (to help minimize your investing risk while maximizing your returns).
Great customer support with access to certified financial planners.
- Fees: 0% at $100 minimum
- Benefit: Receive bonuses on SoFi products, list of low-cost investments to choose from, free management, and automatic rebalancing
To learn more check out our detailed SoFi review.
Blooom is not a traditional robo advisor, but we’ve included it on the list because it’s a valuable tool to optimize your 401(k) plan.
A vast majority of Americans have their retirement savings in either a 401(k) or 403(b) plan and Blooom offers a free analysis tool, access to financial advisors and strategies to help you get the highest return out of your employer-sponsored retirement plan.
- Fees: $10 a month at $0 minimum
- Benefit: Strong asset allocation tools, syncs with 401k plans.
Wealthfront is one of the original robo advisors and offers very similar features, including tax-loss harvesting and more.
While Wealthfront is one of the best robo advisors, at Millennial Money we recommend Betterment, see our Betterment vs. Wealthfront Review, due to their more comprehensive product, which gives you access to financial advisors and individual help.
- Fees: .25% at $500 minimum
- Benefit: Tax-loss harvesting that can add 2% to annual investment performance, good interest rates on FDIC insured cash accounts, and automatic rebalancing.
To learn more check out our detailed Wealthfront review.
Future Advisor is an online financial advisor whose tagline is “Your investment accounts work better when they work together.”
They have a unique robo advisor model where you can link all of your investment accounts to the platform and then they act a fiduciary and can manage your investment accounts for you. You can keep all of your money investested in your current accounts.
For example, just like Blooom they can help you optimize your 401(k) account, in addition to all of your other investment accounts. If you want to keep you money invested with your current financial institution and want a holistic view of your financial life then FutureAdvisor is a great robo advisor to check out.
- Fees: 0.5% at $500 minimum
- Benefit: Well priced and easy entry to robo advising with long term financial planning.
Vanguard Personal Advisor Services
Vanguard Personal Advisor Services is a robo service offering from Vanguard, one of the most respected financial institutions in the world with $5.2 trillion assets under management.
The Vanguard Personal Advisor Service is a full-service robo advisor, in that you get access to a state of the art investing platform and also have the ability to call and talk to a financial advisor who can help you.
Betterment also employs this hybrid computer and human robo-advisor model, although Vanguard is slightly less expensive. To compare them both check see Betterment vs. Vanguard.
Vanguard is also reportedly planning to release a standalone robo advisor, without advisor support, in 2020.
- Fees: $20 annual fee for brokerage and mutual funds, $3,000 – $50,000 minimum
- Benefit: Good starting point for larger investment options.
To learn more check out our detailed Vanguard Personal Advisor Services review.
Ellevest is a robo with financial advisor support, designed around the unique needs of women. It’s goal-focused investing strategies factor in gender-specific considerations like pay and life expectancy.
There are three levels of Ellevest, digital, premium, and private wealth, each with their own fee level and services.
At the digital level you get access to a simple online investing tool with an annual fee of 0.25%. The premium level includes career coaching and financial planning with an annual fee of 0.50%. There’s also a private wealth level, where you get a dedicated team if you invest $1 million or more.
- Fees: 0.25% – 0.50% depending on service level
- Benefit: Automatic rebalancing and tax minimization, premium services allow certified financial planners and executive coaching.
Charles Schwab Intelligent Portfolios
Charles Schwab offers a simple, but robust, robo advisor that’s similar to both Betterment and Wealthfront, but with zero fees. The fact that there are no fees make this an attractive platform if you can meet the $5,000 minimum.
The Intelligent Portfolios also seamlessly integrate with other Schwab products and is available in range of different account types, including a brokerage, IRA, and custodian account.
There is also a premium option where you get one on one access to a Certified Financial Planner® for a one-time setup-fee of $300 and then $30 per month. You need $25,000 to invest in order to get access to the premium level.
- Fees: $0 at $5,000 minimum for standard level, $300 set-up fee and $30 per month with a $25,000 minimum at the premium level.
- Benefits: Zero cost rebalancing investments, automatic tax-loss harvesting, and online tools at the standard level, and access to a CFP® at the premium level.
Why Robo Advisors are a Good Option
Financial investments require solid strategies to maintain and grow wealth while minimizing risks.
Robo Advisors can help you navigate the waters of advanced trading by:
- minimizing risk through tax-loss harvesting in taxable accounts,
- automatic account rebalancing in high growth portfolios,
- strong interest rates on insured cash management accounts,
- and most importantly access to strategies and advisors that will help steer the ship towards higher growth potential.
How Do You Choose The Best Robo Advisor?
Selecting the right robo advisor requires balancing their fee structures with your own investment goals.
If you’re just trying to dip into the waters, then several options meet that criteria.
If you’re wanting a longer-term solution that protects your tax liability and growth strategy, then paying more for services could make sense.
There’s no one size fits all, but here are our picks for the best robo advisors.
Should You Use a Robo Advisor?
Ultimately, selecting a robo advisor to grow your wealth and implement future financial planning strategies will only be as good as the services that you choose.
Since many robo advisors offer financial planning and access to live support they can be very good options for figuring out a lower risk strategy of investment.
Since options range from no minimum and low fee to higher minimum and higher fees, seek out the service that best addresses your needs and current financial strategy. If you want to pursue more aggressive strategies, then mitigating your tax expense is a good way to go.
If you’re just looking to investigate robo advising, choose an option that gives you access to financial planning services.