Compare robo-advisors: Automate your investments |

Compare robo-advisors

Which automated adviser is the best option to manage your investments?

Science-fiction writers have long been predicting that robots will take over the world, and those predictions could soon come true in the lucrative investment advice market.

Recent years have seen the emergence of digital financial advisers — known as robo-advisors — which take advantage of modern technology to offer low-cost investment management services. In this guide we explain how robo-advisors work and how you can compare the services offered by different providers.

Betterment Digital

Our pick: Betterment Digital

Betterment's automatic investment site aims to improve your returns and support good financial habits with passive investing and financial planning support.

  • Automatic portfolio rebalancing
  • Retirement planning tools & custom advice
  • Automatic microsavings with SmartDeposit
  • Tax benefits & deductible donations

    Compare 8 robo-advisors today

    Provider Details Features Learn more
    • Investments used: ETFs
    • Investment strategies: 5
    • Conservative, Moderately conservative, Moderate, Moderately aggressive and Aggressive
    • Asset classes: Real estate, Government bonds, Large companies, Small companies, Emerging markets and Corporate bonds
    • Launched in January 2012
    • Account minimum:
    • Fees: $1 per month
    • Doesn’t require a minimum amount to open an account
    • Totally free to try
    • Investments used: Stocks, options, ETFs, bonds, mutual funds, forex and futures
    • Launched Ally Invest in 2017
    • Account minimum: None for self-directed trading; $2,500 to start investing in a managed portfolio
    • Administrative fees: 0.3% annual advisory fee on managed portfolios
    • Brokerage fees: Varies based on standard and volume/balance pricing. To get volume/balance pricing, you must maintain an average daily balance of more than $100,000 or make 30 or more trades quarterly
    • Investments used: ETFs
    • Up to 12 different asset classes. (U.S. Total Stock Market, Short-Term Treasuries)
    • Launched in 2008
    • Account minimum: $0
    • Annual fee: 0.25%
    • Fund fees: Based on account balance Portfolio strategies; Goldman Sachs Smart Beta portfolios, The Betterment Portfolio, Betterment SRI Portfolio, BlackRock Target Income portfolios
    • Investments used: ETFs
    • Investment Strategies: N/A
    • Asset Classes: Stocks, Bonds, and Cash

    • Launched: N/A – 150 year old financial institution
    • Account minimum: $50
    • Fees: 0.75% annually on your balance
    • Investments used: ETFs
    • Investment strategies: Modern Portfolio Theory (MPT) and PassivePlus®
    • Asset classes: US Stocks, Foreign Developed Stocks, Emerging Market Stocks, Dividend Growth Stocks, Corporate Bonds, Emerging Market Bonds, TIPS and REITs
    • Launched in 2008
    • Account minimum: $500
    • Fees: 0.25% annual advisory fee deducted on a monthly basis
    • The only other fee you incur is the very low fee embedded in the cost of the ETFs you will own that averages 0.08%
    • Investments used: ETFs
    • Investment strategy: Modern Portfolio Theory, the Black-Litterman Model and the Fama-French Five-Factor Model support FutureAdvisor’s investing approach
    • Asset classes: From 12 different assets
    • Launched in 2010
    • Account minimum: $10,000
    • Fees: Management fee of 0.5% annually, expense ratios of funds and trading commissions of $7.95 at Fidelity
    Emperor Investments
    • Investments used: Stocks
    • Investment strategy: Pure equity investments
    • Conservative, Moderately conservative, Moderate, Moderately aggressive and Aggressive
    • Launched in 2018
    • Account minimum: $500
    • Fees: Management fee of 0.6% annually
    • Directly own the companies in your portfolio
    • Investments used: ETFs
    • Investment strategies: Modern Portfolio Theory
    • Launched in January 2017
    • Account minimum: $1
    • Fees: Management fee of 0.5% annually for accounts up to $100,000, 0.4% per year for accounts over $100,000
    • Nobel Prize-winning investment strategy

    Robo-advisors in the US

    Alternative investment classes

    What is a robo-advisor?

    A robo-advisor uses complex algorithms and technology to perform many of the same services as a traditional financial adviser. These digital advisers can provide financial plans to consumers and automatically manage their investments.

    Digital advice services are based more on building and maintaining a portfolio than providing strategic advice, so there will still be a place for traditional financial advisers in the future – in fact, the advantages the technology presents could be very useful tools for financial advisers.
    Humans vs. robots: Which adviser is better?

    How does a robo-advisor work?

    Unlike a traditional financial adviser, a robo-advisor isn’t influenced by emotion when making trades — it relies solely on algorithms and mathematical models to determine the right asset allocations for investors. They’re also much cheaper, with robo advice available for as little as one-tenth of the cost of receiving advice the old-fashioned way.

    But how does the service match you up with a portfolio?

    • Details. Provide your investment goals, investment timeframe and appetite for risk so it can assess which portfolio you’ll be most comfortable with.
    • Review. The robo-advisor generates a recommended investment portfolio, which is usually based on exchange traded funds (ETFs). Review the portfolio and its terms and conditions to ensure you fully understand the risks of investing.
    • Invest. Once you’ve invested, the robo-advisor manages your portfolio and rebalances it whenever necessary to ensure it remains in line with your risk tolerance levels.

    The rise of robo advice

    The robo advice revolution started in the US a few years ago, and since then companies such as Betterment, FutureAdvisor and Wealthfront have enjoyed enormous success. Both Betterment and Wealthfront each manage more several billion dollars worth of customer assets, with the market expected to continue to rapidly expand in coming years.

    In fact, research by KPMG has predicted that by the year 2020, robo-advisors will manage around $2.2 trillion worth of assets. We’ve profiled and compared the established players below, with several more providers expected to launch their own robo advice services in the next 12 months.

    Other services

    Big banks like TD and Charles Schwab have also moved into the robo advice sector. To align with portfolios that best suit your needs, you’re typically screened questions about your current financial situation and future goals before being provided with tailored advice and assessment.

    robo advice banner

    How do I sign up to a robo advice service?

    The signup process differs between robo-advisors, but you’ll generally need to follow these steps:

    • Provide your name, contact details and proof of identity.
    • Complete a questionnaire regarding your investment timeframe and your tolerance for withstanding market fluctuations.
    • The robo-advisor generates a recommended investment portfolio.
    • If you’re happy with the portfolio, you can proceed with the recommended strategy.
    • Provide your bank account details to fund the investment.
    • The robo-advisor invests your money in the chosen portfolio, monitors the account and then makes adjustments to satisfy your tolerance for risk.

    Robo advice may change the face of wealth management around the world by offering a more affordable way for you to look after your investments. However, make sure you compare the benefits and features of the different robo-advisors before choosing the right service for you.

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