Best Robo-Advisors

Published by Blain Reinkensmeyer | January 24th, 2018

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For our Robo-Advisor Review, we assessed, rated, and ranked eight different firms. Instead of relying on website information and marketing materials as most editorials do, we opened and funded an account with each robo-advisor to acquire a true client experience.

After opening, funding, and spending several hundred hours testing accounts with eight different robo-advisors, here is our list of the best robo-advisors of 2018.

What is a Robo Advisor?

A robo-advisor is a digital-first, algorithmic driven investment advisor. While a formal advisory service uses humans to construct a diversified portfolio and provide financial advice, a robo-advisor relies on technology, algorithms, and academic portfolio theory to build and maintain a diversified portfolio.

Both traditional advisors and robo-advisors are regulated by FINRA and are required to file quarterly SEC disclosures.

This guide will introduce investors to robo-advisors and their current role in the investment world.

Best Robo-Advisors Summary

1. Wealthfront

5 Stars | Read Full Review

  • Overview - Thanks to its Path tool, low costs, and tax-efficient strategies, Wealthfront shines, providing clients an excellent robo-advisor experience, regardless of the device used.
  • Likes - Path is thorough in scope and easy to use; Tax-Loss Harvesting program is a nice advantage for taxable accounts; 529 plans are supported.
  • Dislikes - No ongoing market analysis reports provided.

Wealthfront Path home client dashboard

2. Betterment

5 Stars | Read Full Review

  • Overview - Betterment provides great all-round value for investors seeking low-cost, automated retirement guidance. The optional upgrade to Certified Financial Planners (CFPs) on demand offers clients great added value.
  • Likes - User-friendly website; Excellent retirement calculator; Ask financial questions on demand via mobile app.
  • Dislikes - Mobile app lacks depth of functionality available on the website.

Betterment client dashboard

3. Charles Schwab Intelligent Portfolios

4.5 Stars | Read Full Review

  • Overview - Schwab Intelligent Portfolios is a winning combination of crazy low-cost (no annual management fee), quality market reports, and clean goal tracking. That is, as long as you are ok with a high cash allocation potentially affecting performance.
  • Likes - No annual advisory fee; Industry-leading market research reports for clients; Asset allocation can only be changed by retaking the risk-assessment quiz.
  • Dislikes - Minimum of 6% cash in all portfolios; No advanced retirement calculator.

Schwab Intelligent Portfolios account dashboard

4. TD Ameritrade Essential Portfolios

4.5 Stars | Read Full Review

  • Overview - TD Ameritrade Essential Portfolios offers clients the complete package – tools, low cost, and investment wisdom powered by Morningstar – to build and manage automated investment portfolios.
  • Likes - Well-designed website with excellent goal tracking and account-personalized market updates; Stand-alone mobile app replicates the entire web experience; Morningstar handles investment selection, removing any conflicts of interest.
  • Dislikes - No advanced retirement calculator; Chat support system is hard to find on the website.

TD Ameritrade Essential Portfolios goal summary

5. Fidelity Go

3.5 Stars | Read Full Review

  • Overview - Fidelity Go, Fidelity’s robo-advisor service, is a good solution for current Fidelity brokerage clients; however, the service lacks the depth of tools to compete with industry leaders.
  • Likes - Full integration with Fidelity’s primary customer experience for seamless multi-account viewing and investment research; Low “all-in” annual costs of 0.35% for retirement accounts and up to 0.40% for taxable accounts.
  • Dislikes - No tax-loss harvesting; Only basic goal-tracking functionality offered; Fidelity Retirement Score is not built into Fidelity Go dashboard.

Fidelity retirement calculator

6. Ally Invest Advisors

3.5 Stars | Read Full Review

  • Overview - Ally Invest Advisors offers a decent goal-tracking foundation through its LIVE platform; however, a poor approach to portfolio selection and lack of advanced tools is disappointing.
  • Likes - Ally Invest LIVE provides a clean client experience.
  • Dislikes - Onboarding experience; No tax loss harvesting; No mobile functionality beyond portfolio holdings.

ally invest live dashboard

7. Merrill Edge Guided Investing

3 Stars | Read Full Review

  • Overview - Due to its higher cost and lack of tools, Merrill Edge Guided Investing is a viable option solely for current Bank of America and Merrill Edge customers, thanks to its convenience.
  • Likes - Portfolio construction driven by historic brand Merrill Lynch; Universal login and account management makes Guided Investing an easy win for current Bank of America and Merrill Edge clients; Risk-tolerance questionnaire is clean, effective, and incorporates education throughout.
  • Dislikes - Goal tracker is limited in scope and functionality; No dedicated mobile experience.

merrill edge guided investing portfolio analysis

8. E*TRADE Core Portfolios

3 Stars | Read Full Review

  • Overview - E*TRADE Core Portfolios provides a bare-bones experience, with no goal tracker, that trails far behind category leaders.
  • Likes - Seamless multi-account viewing for E*TRADE brokerage customers.
  • Dislikes - No goal tracking; No advanced retirement calculator; Minimal features and tools.

etrade adaptive portfolo portfolio dashboard

Robo Investing Pros and Cons

By removing the human component and using low-cost index exchange-traded funds (ETFs), investors can cut their annual fees by over half.

The average investment advisor in the US charges a management fee of around 1% (of total portfolio assets) per year, whereas robo-advisors charge around 0.30%.

Thanks to the power of compounded returns, these annual savings, which remain invested in the portfolio, turn into significantly higher returns for the investor.

Herein lies the trade-off though. Talk to a Certified Financial Planner (CFP), and he or she will be quick to note that building a diversified portfolio is not the challenge; instead, it is navigating your mind.

Human psychology is complex, and we are all subject to a slew of investor biases; for example, selling during a market downturn instead of staying the course, which can have dire consequences for our financial future.

Robo-advisors create investor confidence by providing a variety of tools to facilitate goal setting and long-term portfolio management.  

For a breakdown of robo-advisor tools, read our full-length robo-advisor reviews.

How to Get Started

To sign up with a robo-advisor, first, you fill out your investor profile (age, income, goals), then complete a risk-tolerance questionnaire. Our research found the average questionnaire incorporates two or three questions.

The data you submit is compiled to determine a “risk score” that establishes a recommended portfolio. Portfolios fall within three primary buckets based on your risk score: conservative, moderate, and aggressive.

Merrill Edge Guided Investing risk questionnaire

If everything looks good, you then complete an application, open the account, and deposit funds.

Once your account is up and running, you can use a variety of tools to monitor your portfolio and track the progress of your goals over time. While robo-advisors can track goals such as saving for a house or vacation, they are overwhelming used for long-term life goals such as saving for retirement.

Is a Robo-Advisor Right for You?

If you are currently disciplined in managing your personal finances, keeping a consistent budget, and have a fundamental understanding that over time the stock market will rise and fall, then a robo-advisor may be a good fit.

You will be able to fully appreciate the retirement and goal-planning tools provided to you, which will enhance your financial prowess.

Wealthfront mobile goal tracker tool

On the contrary, if you are uncomfortable with the stock market and periods of financial uncertainty, such as bear markets, then a robo-advisor may not be an appropriate choice for you.

While goal-planning tools and risk-tolerance questionnaires help encourage staying on course, you ultimately have control of the reins.

You can log in at any time and change your risk tolerance, which in turn will shift your portfolio holdings. Worse yet, worrying about your portfolio could cause you to close the account altogether.  

Fortunately for all investors, the robo-advisor space is evolving at a fast pace. Competition has yielded a variety of new entrants in the past year, each with their take on goal planning on portfolio construction.

Furthermore, nearly all robo-advisors follow a fiduciary standard and several robo-advisors have launched or are in the process of launching, optional upgrades to access low-cost human advice.

Best Robo Advisor

Robo-Advisor Best For Minimum Deposit Annual Fee Overall Rating
Wealthfront Overall $500 0.25% 5 Stars
Betterment Ask questions on-demand $0 0.25% 5 Stars
Schwab Intelligent Portfolios Lowest Cost $5,000 0.00% 4.5 Stars
TD Ameritrade Essential Portfolios Goal Tracker $5,000 0.30% 4.5 Stars
Fidelity Go Current Fidelity Customers $5,000 0.35% 3.5 Stars
Ally Invest Advisors Current Ally Customers $2,500 0.30% 3.5 Stars
Merrill Edge Guided Investing Current BofA Customers $5,000 0.45% 3 Stars
E*TRADE Core Portfolios Current E*TRADE Customers $5,000 0.30% 3 Stars

Best in Class

Our “Best in Class” awards highlight the top three robo-advisors for three categories. Each category winner is displayed below its respective section.

Best in Class for
  • Investment Approach #1 Betterment
    #2 Wealthfront
    #3 TD Ameritrade Essential Portfolios
  • Cost #1 Schwab Intelligent Portfolios
    #2 Acorns
    #3 Wealthfront
  • Platforms & Tools #1 Wealthfront
    #2 Betterment
    #3 Schwab Intelligent Portfolios
#1Goal Tracker Wealthfront Path
#1Retirement Calculator Betterment RetireGuide
#1Market Research Schwab Intelligent Portfolios
#1Mobile App Wealthfront
#1Full Service Robo-Advisor Schwab Intelligent Portfolios

Industry Awards

To recognize the robo-advisors that shine in the areas most important to clients, we distribute industry awards. Here are the 2018 winners.

Robo-Advisor Rankings

To determine an Overall winner, we weighted each category as follows:

  • Tools (27%)
  • Cost (27%)
  • Investment Approach (36%)
  • Opinion (10%)

Click on any category name to filter results by that category. For more information, see How We Test.

BrokersCommissions & FeesOffering of InvestmentsPlatforms & ToolsResearchCustomer ServiceMobile TradingEducationEase of UseBankingOverall Rating
Schwab Intelligent Portfolios
TD Ameritrade Essential Portfolios
Fidelity Go
Ally Invest Advisors
Merrill Edge Guided Investing
E*TRADE Core Portfolios

All pricing data was obtained from a published web site as of 02/18/2019 and is believed to be accurate, but is not guaranteed. The staff is constantly working with its online broker representatives to obtain the latest pricing data. If you believe any data listed above is inaccurate, please contact us using the link at the bottom of this page. For stock trade rates, advertised pricing is for a standard order size of 500 shares of stock priced at $30 per share. For options orders, an options regulatory fee per contract may apply.

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