The Best Robo-Advisors Of 2020
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Modified date: November 26, 2020
You’d like to be a confident investor, but you’re overwhelmed. And why wouldn’t you be?
In a given year, you see thousands of advertisements, all promising the best way to invest. And if you go it alone, you have to choose among tens of thousands of investment funds.
I’m skeptical of studies that suggest Millennials are scared of the stock market. But I do believe it intimidates us. In robo-advisors, technology may have found the answer.
The best robo-advisors offer an affordable alternative to picking stocks or mutual funds on your own or shelling over a lot of money to a wealth manager to invest your money for you.
They’re a responsible way to take hold of your financial situation without needing to understand the ins and outs of stocks, bonds, ETFs, and more.
What’s Ahead:
The best robo-advisors overview
Robo-Advisor | Best For |
---|---|
M1 Finance | Automated and/or hands-on investing |
Betterment | Simple platform, competitive pricing |
Wealthfront | Strong financial planning component |
Ally Invest | Easy application process |
Acorns | Beginner savers and investors |
Wealthsimple | ETF investors |
Personal Capital | High net-worth, access to human advisors |
FutureAdvisor | Free investing resources |
Vanguard | Mutual fund investors |
The best robo-advisors for new investors compared
Here at Money Under 30, we frequently herald the benefits of starting to invest as soon as you can, even in amounts as little as $50. Traditionally, however, investing has been a losing proposition until you’ve amassed a few thousand dollars, simply because trading and minimum balance fees would eat any potential gains on smaller amounts.
Some automatically-managed investment accounts are changing that by offering low minimums and low (or even non-existent) fees on small portfolios.
M1 Finance
M1 Finance offers the best of both worlds—a simplified robo-advisor platform with the capability of selecting your own individual stocks. Get a pre-made portfolio, customize your own or do a bit of both.
Other M1 features:
- M1 is completely free.
- Using a methodology they call “Pies” and “slices”, you can pick and choose a variety of investments and the percentage of your portfolio you want it to make up.
- M1 has a stunning app.
Who is M1 for?
M1 Finance is great for anyone who wants a simplified investment experience, but also wants the option to choose at least some of their investments.
Open an account with M1 Finance or read our full M1 Finance review.
Betterment
Investing really doesn’t get easier than Betterment.
I’ve been a fan of Betterment for years because of its simplicity and it’s many features.
Betterment features
- Customers get Betterment’s core product AND human access to their team of licensed financial experts and CFPs via the mobile messaging interface.
- Open sub-accounts that use different portfolios for reaching multiple goals.
Betterment’s pricing:
- Digital plan charges 0.25% annually. You’ll have access to a full suite of services as well as mobile messaging to an advisor.
- Premium plan charges 0.40% annually if you have a balance over 100k. It includes all features of the Digital plan, plus unlimited calls to Betterment’s team of CFPs.
Open an account with Betterment or read our full review of Betterment.
Wealthfront
Wealthfront isn’t just one of the largest robo-advisors in the U.S., it also tops our list of best robo-advisors for new investors along with Betterment.
Many robo-investing competitors charge fees that can be especially burdensome to new investors with small balances.
Wealthfront fees:
- $500 minimum investment and its fee is 0.25% fixed a year on portfolios over $5,000—a very competitive fee structure.
- Free financial planning. This service can help you determine what kind of app德扑圈官方网址home you can afford based on your finances, figure out when you can retire, and plan for your kids college expenses.
Open an account with Wealthfront or read our full Wealthfront review.
Ally Invest
Ally Invest offers two options for investing: self-directed trading for hands-on investing and also managed portfolios. The managed portfolios are automated investing similar to robo-advisors where they recommend and manage a professionally designed portfolio based on your personal financial goals, risk level, and timeframe for investing.
Ally offers 24/7 support where you can call, chat or email around the clock with a ‘real person’ offering assistance.
Ally’s fees:
- Minimum investment of $100 for managed portfolios
- For self-directed trading, no commission fee on U.S. listed stocks and ETFs
- There are no advisory fees, annual charges, or rebalancing fees
Acorns
Acorns is an app-based robo-advisor that makes it easy to invest amounts as little as $5 a month. You can sign up for as little as $1 a month, with no limit on the amount you can invest at that rate.
Choosing a portfolio is simple; Acorns only gives you five choices. You can also choose to link a credit or debit card, round up purchases, and invest the difference. For $3 a month, you can sign up for a Spend account, which will give you a debit card for your purchases. With the debit card, your purchases are rounded up in real-time.
Acorns pricing:
- $1 a month to invest in stocks and ETFs.
- $3 a month to invest in stocks, ETFs, and retirement savings like IRAs. Also includes Spend.
- $5 a month for investing, retirement savings, spending, and Early, a custodial account that helps you get started with savings for the little ones in your family.
If you want to start investing, but you have a tough time squeezing the money out of your budget, Acorns is a great choice. You’ll barely notice the small amount you’re investing each day and those small amounts will quickly start to add up.
Open an account with Acorns or read our full Acorns review.
Wealthsimple
Wealthsimple is a simple automatic investing platform. They make sure that you have a balanced portfolio of ETFs, which are low-fee funds. ETFs help make sure you’re invested across the whole stock market.
Wealthsimple also offers socially responsible investing options.
Wealthsimple fees:
- No trading, account transfer, or rebalancing fees.
- 0.5% fee for portfolios of $0-$100,000.
- Any portfolio larger than that has a fee of 0.4%.
Open an account with Wealthsimple or read our full Wealthsimple review.
Other best robo-advisors for larger portfolios
If you already have $5,000, $10,000 or $25,000 to invest, there are some other automatically-managed investment accounts to consider.
Personal Capital
Personal Capital is a bit different than the robo-advisors above as it offers a hybrid approach: Investors get award-winning online tools to gain deep insights about their portfolios but also personal attention from licensed financial advisors.
The great thing about Personal Capital is the online tools are completely free to use (and I recommend you do—they’ll help you gain a deeper understanding of your existing investments). Try it here.
Personal Capital fees:
- 0.89% a year on accounts up to $1 million.
- Lower fees are available for clients with $3 million or more.
- There is a $25,000 minimum required for advisory services.
Learn more about Personal Capital or read our full Personal Capital review.
Special offer from Personal Capital: Get a FREE portfolio review valued at $799FutureAdvisor
As an automatically-managed investment account, FutureAdvisor’s flat fee of 0.5% is higher than the competition, but the company offers a couple of features others don’t.
First, while FutureAdvisor portfolios are automatically managed, clients can call a real advisor with questions.
Second, FutureAdvisor offers everybody free tools to help you manage your 401(k), something other robo-advisors can’t do. At FutureAdvisor, anybody can create an account and get investment recommendations—you only have to pay if you want FutureAdvisor to implement those recommendations automatically on your behalf.
Learn more about FutureAdvisor.
Vanguard Personal Advisor Services
Vanguard is the world’s largest mutual fund company and is responsible for making low-cost, passive investing the trend it is today. (In fact, many of the robo-advisors mentioned above construct their portfolios using mostly Vanguard funds).
Earlier in 2015, Vanguard got into the robo-advisor game with its Vanguard Personal Advisor Services. Like Personal Capital, Vanguard Personal Advisor Services is a hybrid approach in which you’ll initially and occasionally work with a licensed advisor to define your goals and balance your portfolio.
Vanguard fees:
- $50,000 minimum portfolio (the largest of the robo-advisors mentioned here).
- An annual fee of 0.30% a year (that’s competitive with fully automatic accounts but includes personalized advice from a human being).
Learn more about Vanguard Personal Advisor Services.
Summary of the best robo-advisors
Robo-Advisor | Minimum Investment Required | Fees | Unique Features |
---|---|---|---|
M1 Finance | $100 | None | Pick and choose investments and the percentage of your portfolio you want it to make up, or let M1 make a portfolio for you |
Betterment | Betterment Digital has no minimum | Betterment Digital: 0.25% Betterment Premium 0.40% | Ability to open sub-accounts that use different portfolios for reaching multiple goals |
Wealthfront | $500 | 0.25% annual fee | Free financial planning They offer a Cash Account with a high APY |
Ally Invest | $100 | $0.00 | No advisory fees, annual charges, or rebalancing fees |
Acorns | $5 | $1-$3/month depending on the package you choose | Acorns is free for students (up until age 24) |
Wealthsimple | None | 0.50% for accounts of $99,999 or less 0.40% for accounts over $100,000 | Wealthsimple also offers Wealthsimple Save, which offers a 1.93% yield |
Personal Capital | Free financial tools; $100,000 minimum for access to a financial advisor | 0.89% for up to $1 million | Free financial tools and app |
FutureAdvisor | $5,000 | 0.5% annual fee | Free tools to help you manage your 401(k) |
Vanguard | $3,000 for most Vanguard funds; Vanguard Personal Advisor Services requires a $50,000 minimum portfolio | $20 annual fee for brokerage and mutual-fund-only accounts | Vanguard has the longest history of any of these options, and their founder created mutual funds |
What is a robo-advisor?
A robo-advisor is a diversified investment account that is automatically managed by a computer algorithm (as opposed to a human money manager).
To an investor, how robo-advisors work is actually quite simple:
- You choose a goal and how much to invest.
- An algorithm chooses the right asset allocation to get you there using a collection of low-cost mutual funds or exchange-traded funds (ETFs).
- The computers keep your portfolio balanced automatically over time and whenever you invest more money.
- For this service, the robo-advisors collect a modest fee that’s between a quarter and half of what you’d pay to an individual wealth manager.
Why should (or shouldn’t) you use a robo-advisor
Robo-advisors are great for beginners
If you’re new to investing, and aren’t afraid of a few fees, robo-advisors are a great option. Why? Well, robo-advisors do all the investing work for you.
Most robo-advisors even help you figure out exactly what your investing goals are and then they’ll take it from there.
Setting up an account couldn’t be easier
With a robo-advisor, you’ll have easy access to your account through websites and mobile apps.
This also makes setting up an account extremely easy (as long as you are phone savvy).
You still have to pay fees
While robo-advisors may seem like a no-brainer, keep in mind that robo-advisors still have fees that can add up over time.
To give you a sense of how robo-advisors compare to other popular types of investing (index funds, target date funds, and financial advisors), here’s a handy table:
Years | Portfolio Value* | Robo-advisor | Index Fund | Target Date Fund | Financial Advisor |
---|---|---|---|---|---|
5 | 31185 | $30,989 (-$196) | $31,146 (-$39) | $31,076 (-$109) | $29,651 (-$1,534) |
10 | 70986 | $70,072 (-$914) | $70,803 (-$183) | $70,473 (-$513) | $64,025 (-$6,961) |
20 | 186615 | $181,524 (-$5,091) | $185,584 (-$1,031) | $183,744 (-$2,871) | $150,068 (-$36,547) |
30 | 374964 | $358,790 (-$16,174) | $371,663 (-$3,301) | $365,806 (-$9,158) | $265,704 (-$109,260) |
40 | 681763 | $640,737 (-$41,026) | $673,326 (-$8,437) | $658,436 (-$23,327) | $421,109 (-$260,654) |
Pros and cons of investing with robo-advisors
Pros
- Automated investing
- Easy to use
- Low fees (on most)
- Typically they offer a low minimum investment
Cons
- Still more expensive than some funds
- No in-person advice
- Limiting if you’re a more advanced investor
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About the

You forgot SoFi Invest. No SoFi fees to use it, just the (super low) expense ratio of the underlying ETFs. Works great! Just pick your risk level and add money. Re-invests the dividends using rebalancing (ie. use the div payment to buy those of your ETFs that have underperformed).
Where can I read about the annual returns on these accounts?
I am not sure if ElleVest is considered a robo-advisor? Would love to hear your thoughts on how they stack up.