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Methodology: How we rate robo-advisors

We rate robo-advisors on 7 key metrics.

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By

Shannon Terrell

Updated

Robo-advisors come in all shapes and sizes. And what may be a perfect fit for one investor won’t be practical for another. To help you decide which service is best for your portfolio, our editors objectively assess each platform across a spectrum of performance metrics.
We consider seven key factors in our ratings:

  1. Fees
  2. Minimum deposit requirements
  3. Account selection
  4. Tax advantages
  5. Customer support
  6. Customer feedback
  7. Mobile app

You’ll notice that the metrics we use to assess robo-advisors differ from the metrics measured in our share trading methodology. And that’s because the services themselves are distinct. Features like automated portfolio rebalancing and tax-loss harvesting don’t apply to a self-directed brokerage account. But they matter for robo-advisors.
These ratings are designed to help you better understand a robo-advisor’s strengths and weaknesses. But the best way to truly understand each rating is to read our full robo-advisor review for a deep dive into its features.

Our ratings

We rate trading platforms using a system of 1 to 5 stars.

★★★★★ 5/5 — Excellent

★★★★★ 4/5 — Good

★★★★★ 3/5 — Average

★★★★★ 2/5 — Subpar

★★★★★ 1/5 — Poor

How we rate fees

We measure robo-advisor fees across two major categories: portfolio management fees and account fees.

Portfolio management fees

Portfolio management fees are the fees a robo-advisor charges to take responsibility for your investments. We take into account both percentage-based and flat-rate fees when making our assessment.

★★★★★ 5/5 No management fee.

★★★★★ 4/5 Reasonable fees, slightly lower than average costs (0.05% – 0.25%, $1 monthly).

★★★★★ 3/5 Fees on par with competitors (around 0.25%, $2 – $5 monthly).

★★★★★ 2/5 Fees noticeably higher than average (0.25% – 0.50%, $5 – $10 monthly).

★★★★★ 1/5 High fees (0.50%+, $10+ monthly).

Account fees

We also assess annual fees, transfer fees and account-closing fees.

★★★★★ 5/5 No account fees.

★★★★★ 4/5 Few fees, lower than average costs.

★★★★★ 3/5 Fees on par with most competitors.

★★★★★ 2/5 Fees noticeably higher than average.

★★★★★ 1/5 High fees.

How we rate minimum deposit requirements

The lower the minimum deposit requirement, the more accessible the service. Robo-advisors that don’t impose minimum deposit requirements earn our highest rating, while those that require high minimum deposits receive fewer stars.

★★★★★ 5/5 No minimum deposit required to access any level of service.

★★★★★ 4/5 Minimum deposit of $1 – $100 required.

★★★★★ 3/5 Minimum deposit of $101 – $500 required.

★★★★★ 2/5 Minimum deposit of $501 – $1,000 required.

★★★★★ 1/5 $1,000+ minimum deposit required.

How we rate account selections

A comprehensive selection of accounts is an asset. Beyond individual and retirement accounts, we reward robo-advisors with niche account offerings, like 529 plans and 401(k) rollover accounts.

★★★★★ 5/5 5+ accounts to choose from.

★★★★★ 4/5 4 accounts to choose from.

★★★★★ 3/5 3 accounts to choose from.

★★★★★ 2/5 2 accounts to choose from.

★★★★★ 1/5 Only 1 account available.

How we rate tax advantages

One way robo-advisors can help optimize the investment process is by offering tax-advantaged accounts and features. Retirement accounts, tax-loss harvesting and tax implication alerts before altering your portfolio can help you get the most from your investments — both now and later in life.

★★★★★ 5/5 All service tiers have access to retirement accounts and tax-loss harvesting.

★★★★★ 4/5 All service tiers have access to retirement accounts but tax-loss harvesting is only for premium accounts — or vice versa.

★★★★★ 3/5 Retirement accounts and tax-loss harvesting are available but only for premium accounts.

★★★★★ 2/5 Offers retirement accounts or tax-loss harvesting.

★★★★★ 1/5 No retirement accounts or tax-loss harvesting.

How we rate customer support

Customer support can have a huge impact on your investment experience. And having more than one way to connect isn’t enough to net you five stars. We also evaluate how responsive the service’s support reps are, contacting each platform to time their response.

★★★★★ 5/5 At least three ways to get help, and a response within 10 minutes.

★★★★★ 4/5 At least two ways to get help, and a response within 20 minutes.

★★★★★ 3/5 At least one way to get help, and a response within an hour.

★★★★★ 2/5 At least one way to get help, but it took more than a day to hear back.

★★★★★ 1/5 We couldn’t get in touch with customer support.

How we rate customer feedback

Reputation matters — especially for an investment platform. We sift through customer reviews across the Better Business Bureau, Trustpilot, the Consumer Financial Protection Bureau, Reddit and more to assess a robo-advisor’s online reputation.

★★★★★ 5/5 Overwhelmingly positive feedback from 50+ customers.

★★★★★ 4/5 Mostly positive reviews with a handful of negative reviews OR overwhelmingly positive reviews but not many overall.

★★★★★ 3/5 Mixed reviews OR few to no reviews available.

★★★★★ 2/5 Generally negative reviews.

★★★★★ 1/5 Overwhelmingly negative reviews.

How we rate mobile apps

Many traders rely on mobile apps to check in on their investments. We average all of the reviews on both the Google Play Store and the Apple App Store to bring you each robo-advisor’s mobile app rating. Our mobile app ratings are updated at least yearly — but if there’s a major change to a company’s rating, we may update it sooner.

Bonus stars

We occasionally award a bonus star when a robo-advisor has a standout feature that sets it apart. If we’ve awarded a bonus star, we’ll explain why in the rating breakdown at the top of the page.

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Finder is not an adviser or brokerage service. Information on this page is for educational purposes only and not a recommendation to invest with any one company, trade specific stocks or fund specific investments. All editorial opinions are our own.

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