Best Robo Advisor Apps to Help You Automate Investments

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Traditionally, whenever you had a question about money, such as where to park your cash or investment advice, you would turn to a financial advisor. Or, if you were fortunate enough, you could pick the brain of a friend or family member who is a financial wizard.



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Today, however, you have another option that you can access right from the palm of your hand whenever you want. And, that would be robo-advisors.

To be fair, this technology has been utilized for years. Software for automating portfolio allocation has been used by human wealth managers since at least the early 2000s. But, when the first robo-advisor Betterment was launched in 2008, the game was changed forever.

Robo-advisors provide automated, algorithm-driven financial planning services with very little human intervention. Most robo-advisors provide you with advice based on your financial situation and goals after completing an online survey. This data is used to invest for you automatically.

How popular has robo money become? In 2021, eMarketer reported that 3.5 million adult investors in the US will use a robo-advisor. With growth of 37.4% in 2020, that’s an increase of 23.2% over that year. Over the next two years, the growth rate in the US will remain in the double digits, putting usage in the range of 5 million adults by 2025.

But, with so many options to choose from, what are the best robo-advisors? Generally, the best platforms should contain the following;

  • Easy account setup
  • Low account minimums and fund fees
  • Integrated goal planning
  • Wide-range of investment vehicles
  • Educational tools and resources
  • Customer support
  • Security

And, the following robo-advisor apps meet the criteria listed above.

1. Betterment

  • Trade commission fees: 0.25% to 0.40%
  • Account minimum: None for Digital account, $100K for Premium
  • Who is this for? You’re interested in a simple rob-advisor with low fees, human advisors, and robust features.

As one of the first robo-advisors on the market in 2008, Betterment has grown to be a respected and popular robo-advisors on the market.

To get started with Betterment, you’ll answer the following questions to assess your risk;

  • How much do you want to invest?
  • Why do you want to invest
  • When you want to cash out.

As you deposit or withdraw funds and change your target allocation, Betterment will automatically recommend stock and bond allocations based on your goals. Furthermore, Betterment’s algorithms will rebalance your portfolio if necessary after monitoring your drift once per day — this is how far you are from your target allocation.

You can also build your own portfolio or adjust it yourself through its user-friendly financial dashboard. In this dashboard, you can review historical investment performance and track the investments to ensure they are on track to meet your goals.

The customer support team is available seven days a week, and you can sync outside accounts as well. With Betterment’s premium plan, however, you have access to a human advisor.

Pros

  • The ability to select various portfolios depending on your goals.
  • An affordable annual advisory fee.
  • A tax management feature that recoups tax losses.

Cons

  • The cost of accessing professional advice is rather high.
  • There may be too many stocks in an emergency fund portfolio.

2. Wealthfront

  • Trade commission fees: after the first $5,000, 0.25%
  • Account minimum: $500
  • Who is this for? You need an automated, goal-based investing tool that shows you how your financial decisions today are affecting your future.

As one of the first robo-advisors on the scene, Wealthfront shares many features with Betterment. Overall, Wealthfront is a solid robo-advisor. But, what makes it unique is its cryptocurrency offerings.

In fact, Wealthfront is the first robo-advisor of its kind to provide crypto trusts with Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE). Further, Wealthfront provides you with almost all of your automated investing needs under one roof. Their wide range of offerings includes ETFs that concentrate on specific industries, including cannabis and autonomous cars.

Pros

  • Fair and competitive advisory fees.
  • Provides tax-efficient trading strategies.
  • Among the few robo-advisors that offer 529 college savings accounts, as well as an 0.1% APY checking account with debit card access.

Cons

  • You won’t be able to trade fractional shares, which could result in more cash in your account than you want.
  • You may feel overwhelmed by the number of features.

3. M1 Finance

  • Trade commission fees: None
  • Account minimum: $100
  • Who is this for? You have experience investing and prefer to go the do-it-yourself route, but don’t want the responsibility of daily portfolio management.

You can invest in particular stocks by using Expert Pies from M1 Finance, which will guide you in selecting the correct amount of investments. In the Pie visual, all your holdings will be visible as slices, and the weight of each slice can be easily adjusted. A slice that exceeds its target weight will grow while an underperformer will decrease.

Additionally, M1 Finance allows fractional shares to be traded. And, as long as your minimum investment is $100 you can use M1 Finance for free.

Pros

  • Your investment account will be managed automatically by M1 Finance after you choose the investments you want.
  • Your account can be divided into any number of individual portfolios using the Pie format. Also, with Pies, you can invest in individual stocks as well as exchange-traded funds. It’s also possible to create a Pie that is entirely comprised of stocks.
  • An M1 Borrow or M1 Invest account can seamlessly be integrated with an M1 Spend account.
  • Take out loans up to 35% of the value of your account at just 4% APR, and repay as you please.

Cons

  • You will not be able to trade individual securities using M1 Finance because it is not a trading platform. All stock purchases must be associated with Pie creation.
  • Your Pies cannot include mutual funds.
  • Tax-loss harvesting is not offered by M1 Finance. In retirement accounts, this isn’t a problem, but many competing robo-advisors are now offering it on taxable accounts.

4. Vanguard Digital Advisor

  • Trade commission fees: None
  • Account minimum: None
  • Who is this for? Low-cost investing is what makes Vanguard the perfect investment for buy-and-hold investors and retirement investors.

Vanguard is one of the largest global investment managers and is considered the pioneer of low-cost, passive investing. In fact, Vanguard ETFs make up the bulk of many robo-advisors’ portfolios.

Using its Vanguard Digital Advisor® robo-advisor, you can easily build a personalized investment portfolio to help you attain your retirement goals. However, the Vanguard Digital Advisor is only available to Vanguard Brokerage Account holders with at least $3,000 in their account. However, you will have access to the benefits of years of data and a portfolio based on low-cost ETFs.

Pros

  • A leading provider of low-cost funds.
  • No commissions on stock, options, or ETF trades.
  • A large selection of mutual funds.

Cons

  • A basic trading platform that’s not ideal for active traders.
  • There is limited research and data available.

5. SoFi

  • Trade commission fees: None
  • Account minimum: None
  • Who is this for? You’re new to investing and want low fees and free advice from a certified financial planner

Launched in 2011, SoFi has been offering some of the most highly rated financial products, which includes SoFi Invest®.

There are no management charges and no minimums associated with SoFi Invest’s automated investing platform. With this robo-advisor, you can select from a wide range of low-cost ETFs and it rebalances your portfolio automatically every quarter.

SoFi also allows you to invest in cryptocurrencies, such as bitcoin and Ethereum, and when you trade for $10 or more, you’ll get $10 in bitcoin. The SoFi app offers another fun introductory perk: a chance to win up to $1,000 when you play the “claw game” after downloading it.

Furthermore, SoFi members enjoy a 0.125% discount on SoFi loans like student loan refinances and personal loans. And, SoFi offers career services and financial advisors, as well as exclusive access to events and experiences for its members.

Pros

  • To get started, all you need is $1
  • There is no annual advisory fee
  • Financial advisors are available at no additional charge

Cons

  • The track record of SoFi as an investment firm is very limited
  • Some of your portfolios may include SoFi ETFs at higher costs
  • Tax losses cannot be harvested

6. Ellevest

  • Trade commission fees: None (although membership fees range from $1 to $9 per month).
  • Account minimum: None
  • Who is this for? It is ideal for new investors looking for advice on investing, saving for retirement, and achieving specific financial goals.

Ellevest is a robo-advisor run and marketed by women, but adults of any gender can open an account with them. It’s a goal-based investing firm c0-founded by former Wall Street executive Sallie Krawcheck. Ellevest charges a flat fee ranging from $1 to $9 a month depending on your investment needs.

As part of the basic tier, you get an investment portfolio, education access, and a high-featured cash management account, such as ATM reimbursements. With higher tiers, you’ll get reduced fees on financial planning and career coaching sessions.

Pros

  • Fees are affordable and there is no minimum investment requirement
  • Through social media and off-platform content, a community that addresses the issues faced by women investors
  • Assistance in setting goals

Cons

  • A cash management account only offers 0% APY
  • Tax losses cannot be harvested
  • The top tier is underwhelming as far as extra benefits are concerned

7. Ally Invest Portfolios

  • Trade commission fees: None
  • Account minimum: None
  • Who is this for? The low-cost options trading and $0 trading costs at Ally Invest appeals to both novice and seasoned investors alike.

You can invest with Ally Invest using either self-directed trading or using a robo portfolio. A robo portfolio is an automated investment similar to the robo-advisor where they recommend and manage a professionally designed portfolio based on the goals and risk level of the investor. In addition, Ally also offers a suite of free tools for technical investors, as well as forex trading and automated portfolio management options.

On the downside, Ally invest’s brokerage account does not offer any interest on cash in it. However, instant money transfers between Ally savings and brokerage accounts are allowed. This allows investors to take advantage of interest rates that are several times higher than those of most brokerage firms’ default sweep rates. You must have an Ally savings account to take advantage of these rates.

Pros

  • You can contact Ally 24 hours a day, seven days a week through live chat, email, or phone.
  • All U.S. stocks, options, and ETFs are commission-free.
  • There is no minimum account balance.
  • Robust research and toolset.

Cons

  • Ally Invest has zero no-transaction-fee mutual funds, making it difficult to build a diversified investment portfolio.
  • There are no physical branches if you wish to have an in-person meeting.

8. Schwab Intelligent Portfolios

  • Trade commission fees: None
  • Account minimum: $5,000
  • Who is this for? Those considering robo-advisors based solely on price may want to consider Schwab Intelligent Portfolios. An annual fee is not charged for the basic account, and a premium account with access to financial advisors is available for a reasonable price.

Schwab Intelligent Portfolios® and Schwab Intelligent Portfolios PremiumTM are two robo-advisor platforms offered by Charles Schwab.

But, what makes Schwab Intelligent Portfolios shine is that it’s a simple and low-cost robo-advisor from a company known to be investor-friendly. The catch? You have to meet the high minimum balance of $5,000.

Additional features worth mentioning include rebalancing and automatic tax-loss harvesting. You also have 24/7 access to U.S.-based customer service.

Pros

  • The basic account is free of management fees
  • Financial advisors are available with a premium account at a competitive fee
  • Portfolios with a wide variety of investments
  • Customer service is available 24/7

Cons

  • Returns can be reduced if the cash allocation is high
  • Minimum balances are high
  • Low-balance accounts cannot harvest tax losses
  • No options for socially responsible portfolios

9. Acorns

  • Trade commission fees: None (Acorns charges flat monthly fees of either $3 or $5 depending on the membership tier).
  • Account minimum: None
  • Who is this for? Invest or save for retirement by rounding up each purchase, automatic recurring investments are also available.

As a micro-investment platform, Acorns allows investors to make small investments. Even better, investing doesn’t require much money to get started or to grow.

When using Acorns’ robo-advisor features, users can take advantage of the platform’s reputable “round-up” savings feature. This means whenever you make a purchase from a linked account it’s rounded up to the nearest dollar. And the balance is then saved in an investment account.

An additional $0.50 will be charged to your linked credit or debit card if you spend $4.50 on a latte, for instance. Acorns’s pro-savings gimmick may encourage you to invest for retirement with the company as well.

Acorns gives its customers access to a diversified portfolio of low-cost ETFs according to their risk tolerance and investment goals, based on their answers to a few questions. These include your age, net worth, income, and how soon you may need the money.

As far as the platform’s fees go, Acorns bills itself as a low-cost option. There are two membership tiers in Acorns, both of which charge flat monthly fees: Personal ($3/month) and Family ($5/month)

Pros

  • Spare change is automatically invested.
  • Portfolio options that are risk-appropriate and low-cost
  • At select retailers, you can earn cashback.
  • Access to educational content.

Cons

  • Depending on your total balance, fees can be high
  • Human advisors are not available or tax losses are not harvested
  • In contrast to other robo-advisors, you have to pay fees to access your checking account

10. Fidelity Go

  • Trade commission fees: None
  • Account minimum: None
  • Who is this for? Investors looking for an all-digital robo-advisor will find that Fidelity Go is a good, low-cost choice.

With many years of experience in brokerage, Fidelity Investments provides a highly capable robo-advisor, with all the core functions (portfolio management, rebalancing) at a price that is suitable for beginners. For assets under $10,000, you’re charged no fees, and for assets up to $50,000, you’re charged $3 a month. After that, you’ll pay a low all-in price of 0.35 percent of your assets.

Existing customers will find Fidelity Go especially useful since they can access all their accounts from one dashboard, as well as open a cash management account if needed. On top of all that, you’ll get the help of Fidelity’s friendly customer service representatives.

Pros

  • Balances under $10,000 are managed for free.
  • There are no investment-expense ratios.
  • Human oversight of portfolios.
  • Fidelity account integration.

Cons

  • Tax-loss harvesting, which makes robo-advisors stand out for taxable accounts, is not available.
  • The advisors at Fidelity Go do manage and rebalance portfolios, but they cannot provide financial planning advice or answer other questions about investments.

11. SigFig

  • Trade commission fees: None (0.25% after the first $10,000)
  • Account minimum: $2,000
  • Who is this for? You can get free management of your retirement account or investment account with SigFig if you are looking for an affordable robo-advisor.

Those who are tech-savvy and enjoy checking their finances on the go will get the most from this robo-advisor. The company offers a free portfolio tracker, and there’s a useful mobile app, which is not common among robo-advisors.

In comparison with other free management services that have a minimum of $1 or $500, the $2,000 minimum account requirement seems excessive. At present, SigFig offers only taxable accounts and retirement accounts, as the company does not offer trusts or 529 college savings plans — the company claims that it’s working on this.

Pros

  • Low fees; no advisory fees up to a certain amount
  • Online portfolio tracking for free
  • Under $10,000, tax losses can be harvested for free

Cons

  • Limited account options.
  • $2,000 minimum account balance

Honorable Mentions

Blooom

In a crowded field of robo-advisors, Blooom stands out in focusing on 401(k)s and IRAs as its niche. Additionally, Blooom’s business model is straightforward. There aren’t account minimums, and there’s a flat annual fee ranging between $45 and $250. If you would like Blooom to analyze your 401(k) for free, you can register for a free account. In Standard and Unlimited tiers, financial advisors and personalized guidance are available.

Personal Capital

As well as offering unlimited access to human advisors, Personal Capital also offers tax-loss harvesting and three tiers of service; investment service, wealth management, and private client. There is a high management fee. But it’s less than a traditional advisor. What’s more, a hefty $100,000 account minimum is required.

Wealthsimple

The Wealthsimple trade platform provides access to the most popular assets for traders. Through the platform, you can trade thousands of ETFs and common stocks on NYSE and TSX-listed stock exchanges. Another plus of Wealthsimple Trade is that it does not charge any commission when you trade through its platform.

Axos Invest Managed Portfolio

Axos views investing as a right, not a privilege. As such, the company believes that people should have the option of investing for free. Using ETFs, investors can invest in a variety of stocks and bonds to construct a personalized, automated portfolio. The platform offers no-commission trading and there’s no minimum investment amount required.

Frequently Asked Questions About Robo-Advisors?

1. What is a robo-advisor?

Robo-advisors create investment portfolios for you using algorithms. A good robo-advisor maximizes your return potential during periods of high risk. Your investments will be then automatically rebalanced by a robot. That means you don’t have to worry about doing this yourself.

2. Is a robo-advisor good for beginners?

If you don’t have much experience with investing, then robo-advisors are an excellent choice when you’re just starting out. In short, new investors should consider a robo-advisor that does not require a minimum opening deposit because they can test out automated investing on a small scale.

At the same time, robo-advisors should not be discarded by experienced investors. These tools can be helpful to those without the time and/or money to perform their own portfolio management. And, you can monitor your investments whenever it is convenient for you.

3. Are there fees associated with robo-advisors?

Short answer, yes.

In general, robo-advisors charge a small fee based on the number of assets managed on behalf of their clients. Moreover, robo-advisors typically require investors to pay fees based on the investments they use.

4. How safe are robo-advisors?

An investment offered by a robo-advisor can lose value, just like any other investment. However, it is likely safer to use a robo-advisor if you have no experience investing than to pick your own portfolio of stocks and bonds. To play it safe, like any investment, robo-advisors should be SIPC-insured.

5. How much money do I need to invest with a robo-advisor?

It varies from robo advisor to robo advisor. But, many of them don’t require any minimums to get started. In some instances, you can even invest with as little as $1.

The post Robo Money: Best Robo Advisor Apps to Help You Automate Investments appeared first on Due.



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