Best of

Best Robo-Advisors of October 2019

Arielle O'SheaOctober 15, 2019

At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.

Summary of Best Robo-Advisors of October 2019

BrokerCommissionsPromotionAccount MinimumLearn More
Wealthfront Logo

Wealthfront

on Wealthfront's website

0.25%

management fee

$5,000

amount of assets managed for free

$500

on Wealthfront's website

Ellevest Logo

Ellevest

on Ellevest's website

0.25%

management fee

Up to $750

cash bonus with qualifying deposit

$0

on Ellevest's website

Ally Invest Managed Portfolio Logo

Ally Invest Managed Portfolio

on Ally Invest's website

0.0%

with Cash-Enhanced Managed Portfolio; 0.3% otherwise

None

$100

on Ally Invest's website

Betterment Logo

Betterment

on Betterment's website

0.25%

management fee

Up to 1 year

of free management with a qualifying deposit

$0

on Betterment's website

Personal Capital Logo

Personal Capital

on Personal Capital's website

0.49% - 0.89%

management fee

2 Free Months

of financial advisory services for NerdWallet users

$100,000

on Personal Capital's website

Sofi Automated Investing Logo

Sofi Automated Investing

on Sofi Wealth's website

0%

management fee

Free

career counseling plus loan discounts with qualifying deposit

$100

on Sofi Wealth's website

Blooom Logo

Blooom

on Blooom's website

$120

per year

$99

per year with code "REEETIRE"

$0

on Blooom's website

BrokerCommissionsPromotionAccount MinimumLearn More
Wealthfront Logo

Wealthfront

on Wealthfront's website

0.25%

management fee

$5,000

amount of assets managed for free

$500

on Wealthfront's website

Ellevest Logo

Ellevest

on Ellevest's website

0.25%

management fee

Up to $750

cash bonus with qualifying deposit

$0

on Ellevest's website

Ally Invest Managed Portfolio Logo

Ally Invest Managed Portfolio

on Ally Invest's website

0.0%

with Cash-Enhanced Managed Portfolio; 0.3% otherwise

None

$100

on Ally Invest's website

Betterment Logo

Betterment

on Betterment's website

0.25%

management fee

Up to 1 year

of free management with a qualifying deposit

$0

on Betterment's website

Personal Capital Logo

Personal Capital

on Personal Capital's website

0.49% - 0.89%

management fee

2 Free Months

of financial advisory services for NerdWallet users

$100,000

on Personal Capital's website

Sofi Automated Investing Logo

Sofi Automated Investing

on Sofi Wealth's website

0%

management fee

Free

career counseling plus loan discounts with qualifying deposit

$100

on Sofi Wealth's website

Blooom Logo

Blooom

on Blooom's website

$120

per year

$99

per year with code "REEETIRE"

$0

on Blooom's website

Our pick for

Best Overall

Robo-advisors excel at different things, but winning the honor of best overall requires a well-roundness that will satisfy the majority of investors. In our latest analysis, the best overall advisor is Wealthfront.

Wealthfront

on Wealthfront's website

on Wealthfront's website

Fees

0.25%

management fee

Account Minimum

$500

Promotion

$5,000

amount of assets managed for free

Pros

  • First $5,000 managed free (NerdWallet promotion).
  • Low ETF expense ratios.
  • Daily tax-loss harvesting.
  • Automatic rebalancing.

Cons

  • No fractional shares.
  • No large-balance discounts.
Read full review

Our pick for

Socially Responsible Investing

Socially responsible investing (SRI) allows you to align your investments with your values. Ellevest, our pick here, delivers socially conscious portfolios without charging higher fees or sacrificing features elsewhere.

Ellevest

on Ellevest's website

on Ellevest's website

Fees

0.25%

management fee

Account Minimum

$0

Promotion

Up to $750

cash bonus with qualifying deposit

Pros

  • Low account minimum and fees.
  • Goal-focused investing approach.
  • Portfolio mix that factors women’s needs.

Cons

  • Few accounts supported.
  • No tax-loss harvesting.
Read full review

Our pick for

Portfolio Mix

Ally Invest Managed Portfolio

on Ally Invest's website

Fees

0.0%

with Cash-Enhanced Managed Portfolio; 0.3% otherwise

Account Minimum

$100

Promotion

None

Pros

  • Solid investment selection.
  • Integration for Ally bank and brokerage clients.

Cons

  • No tax-loss harvesting.
Read full review

Our pick for

Taxable Accounts

If you're not investing in a tax-advantaged account — think IRA or Roth IRA — tax-optimization features can save you real money at tax time. Our top robo-advisor pick for taxable accounts is Betterment.

Betterment

on Betterment's website

on Betterment's website

Fees

0.25%

management fee

Account Minimum

$0

Promotion

Up to 1 year

of free management with a qualifying deposit

Pros

  • No account minimum.
  • Fractional shares limit uninvested cash.
  • Robust goal-based tools.

Cons

  • No direct indexing.
Read full review

Our pick for

Portfolio Mix

Yes, a robo-advisor generally picks your investments for you, but some draw from a wider pool of options or even allow you to customize your portfolio. Our top option for portfolio mix is Personal Capital.

Personal Capital

on Personal Capital's website

on Personal Capital's website

Fees

0.49% - 0.89%

management fee

Account Minimum

$100,000

Promotion

2 Free Months

of financial advisory services for NerdWallet users

Pros

  • Individual securities available.
  • Free, comprehensive investment management tools.
  • Dedicated financial advisors.
  • Advanced tax optimization strategy.

Cons

  • $100,000 account minimum.
  • High management fee.
Read full review

Our pick for

Access to a Financial Advisor

If access to a human advisor appeals to you, you have more options than ever among robo-advisors. Some charge a higher fee for that access, but SoFi Automated Investing offers it to all clients, making it our top pick here.

Sofi Automated Investing

on Sofi Wealth's website

Fees

0%

management fee

Account Minimum

$100

Promotion

Free

career counseling plus loan discounts with qualifying deposit

Pros

  • Broad range of low-cost investments.
  • Free management through 2019.
  • Automatic rebalancing.
  • Customer support.
  • Access to certified financial planners.

Cons

  • Limited account types.
  • No tax-loss harvesting.
Read full review

Our pick for

401(k) Management

Most robo-advisors offer taxable accounts and IRAs, but won't assume direct management of your 401(k). Blooom is an exception to this rule, and it's our pick for 401(k) management from a robo-advisor.

Blooom

on Blooom's website

on Blooom's website

Fees

$120

per year

Account Minimum

$0

Promotion

$99

per year with code "REEETIRE"

Pros

  • 401(K) management.
  • No account minimum.
  • Free analysis.
  • Access to financial advisors.

Cons

  • Limited risk tolerance assessment.
  • Aggressive asset allocation.
  • High costs for small account balances.
Read full review

Want to compare more options? Here are our other top picks:

What is a robo-advisor?

A robo-advisor is an online, automated investment management service. Robo-advisors use computer algorithms to build a portfolio and manage asset allocation based on your risk tolerance and investing goals. As daily portfolio management is handled by software rather than a human financial advisor, robo-advisors charge lower fees, which can translate to higher long-term returns for investors.

How does a robo-advisor work?

Robo-advisors use advanced software to automate many of the tasks that used to require expensive experts to manage. Services range from automatic rebalancing to tax optimization, and require little to no human interaction.

That said, many providers offer access to human advisors available for questions related to account management or long-term investment planning — though these services may cost more. (Want to know more? Dig into the details of how robo-advisors work.)

A robo-advisor is a good fit for you if you prefer to be largely hands-off with your investments — letting someone else do the work of building and optimizing your portfolio — and you don’t have the kind of complex financial situation that requires a direct relationship with a human financial advisor. (If you’d rather be hands-on, read about how to invest in stocks on your own.)

To help you pick the best robo-advisor for you, we’ve selected the top two online advisors in six categories.

Not sure which advisor to choose?

Here’s what you should consider:

MANAGEMENT FEES

This is what you’ll pay annually to have an account at a robo-advisor. The fee, which is often assessed as a percentage of your assets with the advisor, is typically deducted from your account balance.

Why it matters: Any fee, including a management fee, reduces your return. If you’re earning a 7% annual return on your portfolio, and you’re paying a 0.25% annual management fee, your return is effectively 6.75%. Even small fees add up over time.

EXPENSE RATIOS

These are like management fees, only they’re paid not to the robo-advisor, but to the investments the robo-advisor uses. Mutual funds, index funds and exchange-traded funds all charge this annual fee to cover the costs of running the fund.

Why it matters: Same reason as above: All fees eat into your investment return. You can’t avoid expense ratios as a fund investor, whether you invest through a robo-advisor or on your own. But you can keep them down by choosing an advisor who uses low-cost funds. Knowing average mutual fund expense ratios can help you gauge whether you’re paying too much.

ACCOUNT TYPES

Investment accounts fall into two general categories:

  • Retirement accounts, such as IRAs and 401(k)s. These offer tax advantages for contributions and often have rules about how much you can contribute and when, and how you can take distributions. Read more about retirement accounts.
  • Nonretirement accounts. Often called taxable accounts, there are no specific tax advantages for contributions to these, but they’re also not subject to contribution limits or distribution rules.

Why it matters: Make sure the robo-advisor you choose manages the kind of account you want to open. Your account also helps determine which features apply to you — for example, tax-loss harvesting, discussed below, is only used on taxable, nonretirement accounts.

INVESTMENTS

Most robo-advisors use low-cost index funds and ETFs.

  • Index fund: A mutual fund that passively tracks an index or benchmark. A Standard & Poor’s 500 index fund, for instance, aims to mirror the performance of the S&P 500. Index funds attempt to follow the market, not beat it, and hold a group of individual investments, making them inherently diversified. Learn more about index funds.
  • ETF: Like an index fund, an ETF holds many individual investments and tracks an index or benchmark. The major difference is that ETFs trade on an exchange, like individual stocks, and can often be purchased for a lower investment than a full-fledged fund. Learn more about ETFs.

Why it matters: Be sure the advisor you choose offers the investments you want, and make sure those investments are low cost. A select few robo-advisors add in actively managed mutual funds and individual stocks, or they customize portfolios completely.

TAX-LOSS HARVESTING

Tax-loss harvesting involves selling losing investments and using the loss to reduce or eliminate the taxes you’ll owe on capital gains. The IRS has plenty of rules around this — and the practice itself is fairly complex — so it’s a boon if a robo-advisor is willing to do it for you. Here’s a full explanation of tax-loss harvesting.

Tax-loss harvesting can be harder with the fund portfolios that most robo-advisors use — because index funds and ETFs hold a number of different investments, you can’t dial down to specific losers as easily. An index might be up overall but still hold investments that are down. Some robo-advisors buy individual stocks to replicate an index, allowing them to sell specific losers. Wealthfront calls this service direct indexing.

Why it matters: It might not. Tax-loss harvesting doesn’t apply to retirement accounts, where taxes are deferred and capital gains taxes don’t come into play. It only applies to taxable accounts, where it might save you a significant amount of money.

REBALANCING

A portfolio is fluid, and market fluctuations can cause the mix of investments you hold — called your asset allocation — to get out of sync with your goals. Rebalancing brings that allocation back to its original mix. Many robo-advisors check for rebalancing opportunities daily and make portfolio changes when an allocation strays by a set amount — say, 5% or more.

Why it matters: When a particular asset class is doing well — let’s say the U.S. stock market is roaring — you could end up with more of your money in that class than you intended, due to outsize growth. If your original allocation was 50% stocks and 50% bonds, a portfolio that has shifted toward 70% stocks is probably too risky. Learn more about rebalancing.

ACCESS TO HUMAN ADVISORS

Many robo-advisors have merged computer-driven portfolio management with access to human financial advisors. The level of that access varies: Some services offer a dedicated advisor to individual clients; others offer only email or online chat with a team of advisors. As you can imagine, you’ll pay more for the former.

Why it matters: The financial advice industry has traditionally locked out small account balances. These services bring at least some level of human advice to accounts of any size. If you’re loath to turn things over completely to a computer, a hybrid service is a good middle ground. Here’s more about how to find the best financial advisor for you.

SOCIALLY RESPONSIBLE INVESTING

Often called SRI, impact investing or values-based investing, this strategy is employed by investors who aim to align their investments with their values. Companies that promote social good are often included in SRI funds and portfolios; companies in controversial industries, such as guns or fossil fuels, may be excluded.

Why it matters: If putting your money where your values are is important to you, you’ll want to choose a robo-advisor that offers investments that meet those standards.

Last updated on October 15, 2019

Methodology

NerdWallet's ratings for brokers and robo-advisors are weighted averages of several categories, including investment selection, customer support, account fees, account minimum, trading costs and more. Our survey of brokers and robo-advisors includes the largest U.S. providers by assets under management, plus notable and/or emerging players in the industry. Factors we consider, depending on the category, include advisory fees, branch access, user-facing technology, customer service and mobile features. The stars represent ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.

To recap our selections...

NerdWallet's Best Robo-Advisors of October 2019

Frequently asked questions

Robo-advisors automate investment management by using computer algorithms to build you a portfolio and manage your assets based on your goals and your tolerance for risk. Since portfolio management is handled by software rather than a human financial advisor, robo-advisors charge lower fees, which can translate to higher long-term returns for investors.

Robo-advisors use advanced software to handle many of the tasks that used to require expensive experts to manage. Services range from automatic rebalancing to tax optimization, and require little to no human interaction. A robo-advisor might be a good fit if you prefer to be largely hands-off with your investments and you don’t have the kind of complex financial situation that requires a direct relationship with a human financial advisor.

That said, many providers offer access to human advisors available for questions related to account management or long-term investment planning — though these services may cost more.

Here’s what you should consider:

  • Management fees. This is what you’ll pay annually to have an account at a robo-advisor.
  • Expense ratios. These are like management fees, only they’re paid not to the robo-advisor, but to the investments the robo-advisor uses. Mutual funds, index funds and exchange-traded funds all charge this annual fee to cover the costs of running the fund.
  • Account types. Investment accounts fall into two general categories: Retirement accounts, such as IRAs and 401(k)s, that offer tax advantages while adhering to certain rules; and taxable accounts, where there are no specific tax advantages but also no limits on contributions or distributions.
  • Investments. Most robo-advisors use low-cost index funds and ETFs.
  • Rebalancing. Portfolios are fluid, and market fluctuations can cause the mix of investments you hold to get out of sync with your goals. Rebalancing brings that allocation back to its original mix.
  • Access to human advisors. Many robo-advisors have merged computer-driven portfolio management with access to human financial advisors. Some services offer a dedicated advisor to individual clients; others offer only email or online chat with a team of advisors.