Best Robo-Advisors: 2017 Top Picks

Advisors, Investing

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We spent over 300 hours reviewing the top online robo-advisors before selecting the best for our readers. And to help you find the one that’s best for you, we’ve highlighted their pros, cons and current offers.

The robo-advisor has officially gone mainstream, with a series of automated advisory launches over the past year by incumbent online brokers. E-Trade put out E-Trade Adaptive Portfolio, Fidelity now has Fidelity Go, and TD Ameritrade soft launched TD Ameritrade Essential Portfolios.

And yet despite — or perhaps because of — their ties to established heavy hitters in the field, these newcomers brought little innovation. Most failed to stand out in NerdWallet’s in-depth analysis of the industry, falling short of independent startups like Betterment and Wealthfront or merely mimicking those services at a higher price.

What is a robo-advisor?

If you’re late to this trend, here’s a quick catch-up: By definition, a robo-advisor is an online, automated portfolio management service. Because these companies use computer algorithms to manage client investments, robo-advisors can offer their services for a fraction of the cost of a human financial advisor.

That lower-cost management, combined with features like automatic portfolio rebalancing and tax-loss harvesting, can translate into higher net returns for investors. To help you pick the best robo-advisor for you, we’ve selected the top two online advisors in six categories.

The best robo-advisors overall

Wealthfront and Betterment offer low management fees, reasonable minimums and innovative tools.

It takes a lot for smaller, independent companies to maintain their footing amid a slew of new launches, but Betterment and Wealthfront have managed to do that. They pioneered this industry, and they remain the best two options for most consumers, according to NerdWallet’s objective ranking system. That’s due to their low account minimums, easy-to-use interfaces and innovative features. Both robo-advisors offer automatic rebalancing, tax-loss harvesting and diversified portfolios.

Where the services differ is in their fee structure. Betterment uses a three-tier pricing system that reduces fees at higher account balances, charging as little as 0.15% on $100,000 or more. Wealthfront charges a flat 0.25% but manages the first $10,000 invested for free.

That means Wealthfront costs less for accounts with balances below $100,000. Once an investor crosses that threshold, Betterment becomes a better value, with one caveat: That fee gap may close on taxable accounts that are eligible for Wealthfront’s direct indexing service. We get into this more below (see the taxable account category).

Best robo-advisors for free management

These robo-advisors will manage your portfolio free of charge.

Let’s make one thing clear: Very little in financial services is completely free. Both WiseBanyan and Charles Schwab Intelligent Portfolios offer portfolio management free of charge, but the investments used — primarily exchange-traded funds — still carry expense ratios.

Investment expenses are an added cost at all of these robo-advisors, so overall, you’re still likely to pay less for these services. Do you get what you pay for? In some ways. WiseBanyan offers tax-loss harvesting only as a paid add-on. Opting in will bring your total cost to 0.25%, up to a maximum of $20 a month. That’s in line with top choices Betterment and Wealthfront. Schwab offers tax-loss harvesting only on taxable account balances of $50,000 or more. The company uses many of its own funds in client portfolios — meaning those aforementioned expense ratios add to its bottom line — but the portfolios are impressive, drawing from over 20 asset classes.

Best for access to a financial advisor

These robo-advisors combine the lower costs of online investment management with human advisors.

If you’re not comfortable with a computer taking the reins, but you’re intrigued by the lower management fees involved, you might be interested in a hybrid service that pairs computer automation with human financial advisors. The best of these hybrid services come from Vanguard Personal Advisor Services and Personal Capital.

Both have high minimum investments — $50,000 and $25,000, respectively — but offer personal service with customized portfolios and access to financial advisors. Vanguard’s management fee is more in line with the rest of the robo-advisor competition at 0.30%. It is subsidized, at least in part, by the use of Vanguard’s own funds in portfolios. But that service offers a dedicated advisor only to investors with balances of $500,000 or more. Below that, accounts are serviced by a rotating cast. Personal Capital’s fee skews high — accounts with balances under $1 million pay 0.89% — but all clients get at least one dedicated advisor.

Best robo-advisors for taxable accounts

These robo-advisors offer first-rate tax efficiency and optimization services.

Both Wealthfront and Personal Capital offer superior tax optimization services for customers with taxable accounts — like individual or joint non-retirement accounts — especially those with balances that top $100,000. Wealthfront’s direct indexing service buys individual securities rather than index funds or ETFs, zeroing in on tax-loss harvesting opportunities. The company says the service can add as much as 2.03% to annual investment performance, effectively canceling out the fee difference between Wealthfront and Betterment on taxable accounts of that size.

Personal Capital also uses individual securities rather than funds where appropriate, though it draws from a smaller selection. The company says its tax optimization strategies can increase returns up to 1% annually.

Best robo-advisors for IRA management

Betterment and newcomer Fidelity Go both offer quality resources for retirement investors.

Nearly all robo-advisors will manage your IRA, so what makes these guys special? Both services are retirement focused. Betterment’s RetireGuide allows users to link non-Betterment accounts, including outside 401(k)s, then offers comprehensive retirement planning guidance and behavior-finance rooted tools that can push you to save more.

Fidelity is one of the biggest 401(k) plan providers, making for easy 401(k) to IRA rollovers if you already have other accounts held there. But this robo-advisory offering adds to that lineup: Fidelity Go users get full access to the broker’s retirement planning tools and apps.

Costs are similar at both offerings, though the pricing structure is different. Betterment charges a standard management fee of 0.15% to 0.35%, depending on account balance, then uses funds that charge expense ratios between 0.09% and 0.17%. Fidelity Go breaks from the traditional robo-advisor pricing model to charge an all-in fee that includes investment expenses; that cost is just 0.35% for retirement accounts. The company has a high minimum investment requirement, however, at $5,000 to Betterment’s $0.

Best robo-advisors for 401(k) management

These advisors will manage your employer-sponsored retirement plan.

Most robo-advisors manage IRAs and taxable accounts but leave you in the dark about your 401(k). These two advisors attempt to fill that hole. Blooom focuses on management of employer-sponsored plans like 401(k)s and 403(b)s. It charges flat monthly fees of $5 for balances under $20,000; $19 for balances of $20,000 to $500,000; and $99 for balances of $500,000 or more. The company works within the investments offered by your plan and offers free analysis so you can test the service before signing up. It also provides financial advisors who can help investors with a range of financial planning questions.

FutureAdvisor manages an array of account types held at Fidelity or TD Ameritrade for a 0.50% management fee, but the real shining star is its 401(k) management. The service will manage Fidelity 401(k)s that are enabled with BrokerageLink for free. You don’t have to have another account enrolled in FutureAdvisor’s paid service, but your 401(k) does have to meet its $10,000 account minimum.

Best robo-advisors: Summary

Annual Fee
Account minimum
Start investing
and minimizing taxes
Tax efficient direct indexing (accounts $100,000+)
0.25% of account balance
$15,000 managed free (NerdWallet readers)
Overall, IRAs
Goal-based tools help savings, guide asset allocation
0.15-0.35% of account balance
One month free management with $10,000 deposit.
Free management;
add-on services are paid
Charles Schwab Intelligent Portfolios
Charles Schwab Intelligent Portfolios
Trusted leader in financial services
Manages Fidelity 401(k)s
for free
0.5% of balance; several services free
Three months free
$10,000 (premium service)
Manages employer 401(k) plans for flat fee
$5 to $99
per month
NerdWallet readers pay just $4 to $79 per month
Vanguard Personal Advisor Services
Vanguard Personal Advisor Services
Access to financial advisor
Portfolios built on client-by-client basis with advisor
0.30% of account balance
Personal Capital
Personal Capital
Access to financial advisor + Minimizing taxes
Hybrid service; some tools free; individual securities ($100,000+)
0.49-0.89% of account balance
Personal Capital
Fidelity Go
Retirement planning tools; all-in fee
0.35% of account balance; includes investment expenses

Arielle O’Shea is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @arioshea.