How to Find the Best Robo-Advisor

These profiles of leading robo-advisors will help you find the best options for your robo-investing needs.
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By Richard Barrington

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Acorns

https://www.acorns.com/

REGISTRATION STATUS

The Acorns saving/investing platform is operated by Acorns Advisers, LLC, an SEC-Registered Investment Advisor.

FEE STRUCTURE

For most investors, Acorns offers three tiers of service at a flat rate of $1, $2 or $3 a month. They have different pricing for portfolios of $1 million or more. The ETFs used to construct portfolios have additional management fees which vary depending on the type of fund.

MINIMUM ACCOUNT SIZE

None

INVESTOR FIT

  • Good for: Small investors who want to choose a pre-defined portfolio.
  • Not as good for: Investors seeking tools to help them match a portfolio with their goals, or a more customized investment approach.

DETAIL

Acorns allows investors to start small and accumulate money gradually. They offer participation in a range of five standard portfolios with different asset mixes ranging from conservative to aggressive. Acorns provides automatic rebalancing for these portfolios, and human assistance is available.

Ally Financial

https://www.ally.com/invest/managed-portfolios/

REGISTRATION STATUS

Ally Financial is affiliated with both a bank and a broker-dealer, but their advisory products and services are offered through Ally Invest Advisors, Inc., an SEC-Registered Investment Advisor.

FEE STRUCTURE

Ally charges an annual advisory fee of 0.30 percent of assets under management. Clients may incur additional charges via the expense ratios of ETFs and other vehicles Ally uses to implement its portfolio management approach.

MINIMUM ACCOUNT SIZE

$100

INVESTOR FIT

  • Good for: Small investors who want some element of personalization in their investment approach.
  • Not as good for: Investors seeking a great deal of visibility as to the portfolio construction process or individual holdings.

DETAIL

Ally Financial uses third-party ETFs and other vehicles to construct a portfolio based on individual characteristics provided by the client. The client can then further customize the recommended portfolio, with additional help available from human specialists. Portfolios are rebalanced to their target asset mixes automatically.

AssetBuilder

https://assetbuilder.com/

REGISTRATION STATUS

AssetBuilder, Inc., is an SEC-registered investment advisor. AssetBuilder has partnered with Dimensional Fund Advisors, a fund manager, to provide the various funds used to construct its portfolios.

FEE STRUCTURE

AssetBuilder charges clients an annual advisory fee of between 0.20 percent and 0.45 percent, depending on the account size. In addition, clients incur annual charges of between 0.25 percent and 0.45 percent via the expense ratios of the funds used to construct the portfolios, along with commission expenses when portfolios are set up or the funds within them are adjusted.

MINIMUM ACCOUNT SIZE

$50,000

INVESTOR FIT

  • Good for: Investors who want an automated-asset-allocation approach based on a basic risk-tolerance assessment.
  • Not as good for: Very small investors or those who want an advisor with the flexibility to choose from multiple fund families.

DETAIL

AssetBuilder offers a range of eight standard portfolios starting at 20 percent equity/80 percent fixed income and ranging up to the most aggressive version of 90 percent equity/10 percent fixed income. Its website offers an easy-to-use, rudimentary tool to assess risk tolerance as a means of guiding the selection of a portfolio type. Portfolios are rebalanced automatically.

Betterment

https://www.betterment.com/

REGISTRATION STATUS

The advisory site is operated by Betterment LLC, an SEC-registered investment advisor. Brokerage services are provided to clients of Betterment LLC by Betterment Securities, an SEC-registered broker-dealer.

FEE STRUCTURE

Betterment offers two tiers of service, the first at an annual fee of 0.25 percent for basic automated management and the second at 0.40 percent which includes automated management plus access to Betterment’s team of Certified Financial Planners and coordination of your Betterment portfolio with your outside investments. Betterment uses ETFs which may have an additional cost via their expense ratios, but there are no commission charges on ETF trading.

MINIMUM ACCOUNT SIZE

None for the basic service, $100,000 for the premium service

INVESTOR FIT

  • Good for: Investors who want to combine ease of access with a degree of personalization in the construction and customization of portfolios.
  • Not as good for: Investors who want the transparency and detailed control that comes with owning individual securities.

DETAIL

Betterment uses ETFs to construct an asset mix based on their clients’ investment goals. It offers tax-loss harvesting and automatic rebalancing, plus the opportunity for clients to make manual adjustments to their investment mix. At the premium service level, Betterment adds the ability to coordinate your managed portfolio with outside investments to help keep your overall asset mix in line with your objectives.

Schwab Intelligent Portfolios

https://intelligent.schwab.com

REGISTRATION STATUS

The Schwab Intelligent Portfolios platform is made available through Charles Schwab & Co., Inc., a dually registered investment advisor and broker-dealer.

FEE STRUCTURE

Schwab charges no advisory fee, but earns money via the expense ratios of its own ETFs, some of which are used to construct the portfolios in this platform. Those expense ratios vary based on the objective of the ETF.

MINIMUM ACCOUNT SIZE

The minimum account size is $5,000 for the basic service, and $50,000 if you want tax-loss harvesting.

INVESTOR FIT

  • Good for: Relatively small investors and those who want to avoid paying an advisory fee on top of ETF expense ratios.
  • Not as good for: Investors who want complete independence between their advisor and the ETFs selected for their portfolios, since Schwab uses some of its own ETFs.

DETAIL

Schwab uses an asset allocation model to develop a portfolio of ETFs based on information gleaned from a client questionnaire. Portfolios are rebalanced automatically, and tax-loss harvesting is available to larger clients.

Ellevest

https://www.ellevest.com/

REGISTRATION STATUS

Ellevest, Inc. is registered with the SEC as an investment adviser firm.

FEE STRUCTURE

An annual fee of 0.25 percent for the basic service or 0.50 percent for the premium service. These fees are on top of expenses incurred via the ETFs used to construct portfolios.

MINIMUM ACCOUNT SIZE

None for the basic service, and $50,000 for the premium service.

INVESTOR FIT

  • Good for: Investors who are interested in an investment approach geared toward women’s financial needs with the opportunity to make specific investments deemed supportive of women’s issues.
  • Not as good for: Investors who are not interested in a gender-specific investment approach.

DETAIL

Uses an algorithm to determine an asset allocation designed to meet stated client goals, and uses ETFs to construct a portfolio according to that target allocation. The approach is geared to specifically acknowledge certain investment characteristics of women based on differing earnings patterns and lifespans.

Ellevest also offers the opportunity to participate in impact-investing portfolios which are designed to make investments in companies supportive of women. Access to an Ellevest Certified Financial Planner is available to premium-level clients.

FutureAdvisor

https://www.futureadvisor.com/

REGISTRATION STATUS

FutureAdvisor is owned by Blackrock, Inc., an investment adviser registered with the SEC.

FEE STRUCTURE

An annual fee of 0.50 percent. Additional costs may be incurred via expense ratios used to construct the portfolio and commissions for trading those funds.

MINIMUM ACCOUNT SIZE

$5,000

INVESTOR FIT

  • Good for: Current investors who want to adopt a robo-advisor approach without relinquishing all their existing investment accounts and holdings.
  • Not as good for: Investors who want to minimize advisory fees.

DETAIL

FutureAdvisor uses an algorithm to target an asset allocation based on the client’s goals, but where FutureAdvisor differs from most robo-advisors is in the ability to incorporate existing brokerage accounts and mutual funds into its asset-allocation model. For individual accounts, FutureAdvisor will directly trade the holdings in those accounts in accordance with its model. For employer-sponsored accounts, FutureAdvisor can take them into consideration in its asset-allocation approach but cannot actively trade them.

Hedgeable

https://www.hedgeable.com/

REGISTRATION STATUS

Hedgeable, Inc., is a Registered Investment Advisor firm with the SEC.

FEE STRUCTURE

Starts at an annual fee of 0.75 percent for portfolios under $50,000 and scales down incrementally to 0.30 percent for portfolios of $1 million and up. Additional expenses may be incurred from the ETFs used in portfolio construction.

MINIMUM ACCOUNT SIZE

$1

INVESTOR FIT

  • Good for: Smaller investors who crave a degree of customization generally reserved for larger investors.
  • Not as good for: Highly cost-conscious investors looking for one of the least expensive options available.

DETAIL

Hedgeable uses an algorithm to set an asset-allocation target based on client objectives and rebalances to that target automatically. Hedgeable differs from most robo-advisors in that it has the capability to use individual securities in addition to ETFs and other funds. Hedgeable also offers the option of participating in social-investing options pursuant to eight different social-responsibility themes.

Personal Capital

https://www.personalcapital.com/

REGISTRATION STATUS

Personal Capital Advisors Corporation is an investment advisor registered with the Securities and Exchange Commission.

FEE STRUCTURE

0.89 percent for portfolios under $1 million. Additional expenses may be incurred from the ETFs used in portfolio construction.

MINIMUM ACCOUNT SIZE

$100,000

INVESTOR FIT

  • Good for: Investors wanting an automated approach that provides for an unusual degree of detailed customization.
  • Not as good for: Smaller accounts or highly cost-conscious investors looking for one of the least expensive options available.

DETAIL

Besides formulating a general asset allocation based on detailed client characteristics, they add extra levels of customization by using individual securities in addition to ETFs in portfolio construction, offering the option of social-investing filters, and incorporating outside portfolios into their tools and methodology.

SigFig Wealth Management

https://www.sigfig.com/site/#/home/am

REGISTRATION STATUS

SigFig Wealth Management LLC is an SEC-registered investment advisor.

FEE STRUCTURE

First $10,000 is free, and the annual fee for assets above $10,000 is 0.25 percent. Additional expenses may be incurred from the ETFs used in portfolio construction.

MINIMUM ACCOUNT SIZE

$2,000

INVESTOR FIT

  • Good for: Relatively small investors looking to get started at very low cost.
  • Not as good for: Investors interested in highly customized portfolios including individual securities as well as funds.

DETAIL

Uses an algorithm to develop an asset allocation designed to be optimal relative to the client’s goals. SigFig rebalances automatically and considers several aspects of tax implications in its portfolio decisions.

About Author
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Richard Barrington
Richard Barrington has been a Senior Financial Analyst for MoneyRates. He has appeared on Fox Business News and NPR, and has been quoted by the Wall Street Journal, the New York Times, USA Today, CNBC and many other publications. Richard has over 30 years of experience in financial services. He has earned the Chartered Financial Analyst (CFA) designation from the Association of Investment Management and Research (now the “CFA Institute”).