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We spent over 300 hours reviewing the top 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.
Given the recent proliferation of robo-advisors, you’d think it’s almost passé to have a human manage your investments in 2018. With the launch of numerous automated advisories in recent years and increased competition within the industry, it all boils down to good news for consumers.
Here’s how the industry has evolved: The number of providers continues to swell (NerdWallet conducted an in-depth analysis of more than 20 robo-advisors this year), as does the range of services (things like socially responsible investing or access to financial advisors) and low-cost options for all types of investors. Independent startups like Betterment and Wealthfront still lead the pack, but robos tied to incumbent online brokers have stepped up their offerings.
What is a robo-advisor?
A robo-advisor is an online, automated portfolio management service. Because these companies use computer algorithms — a set of rules to choose appropriate investments based on your risk tolerance and time horizon — they can offer robo-advisor 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. 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.
To help you pick the best robo-advisor for you, we’ve selected the top two online advisors in six categories.
NerdWallet’s top robo-advisors in 2018
Fees
0.25%
management fee
Account minimum
$500
Promotion
$5,000
amount of assets managed for free
The bottom line
Wealthfront has built client trust by offering free management on the first $5,000 — with NerdWallet’s promotion — but the company’s direct indexing service really shines, adding as much as 2% to annual investment performance for eligible accounts.
Show pros & cons
Pros
First $5,000 managed free (NerdWallet promotion).
Low ETF expense ratios.
Daily tax-loss harvesting.
Direct indexing on accounts over $100,000.
Automatic rebalancing.
Cons
No fractional shares.
No large-balance discounts.
Fees
0.50%
management fee
Account minimum
$0
Promotion
$50
cash bonus with deposit of at least $1,000 in first 30 days
The bottom line
Wealthsimple’s $0 minimum balance requirement, hands on human help and its no-fuss, streamlined design make it an attractive place for beginners to start their investing journey. But the company’s real standout feature among the robo-advisor competition is its lineup of socially responsible investment (SRI) portfolios, a refreshing addition for values-based investors. Another unusual offering that customers with taxable investment accounts will appreciate is free free tax-loss harvesting, no minimum account balance required.
Show pros & cons
Pros
Free access to human advisers
Free portfolio analysis
Free tax-loss harvesting
Socially-responsible investment options
No account minimum
Cons
Higher account management fees
Limited free-management promotion
Limited personal finance tools
Fees
0.25%
management fee
Account minimum
$0
Promotion
Up to 1 year
of free management with a qualifying deposit
The bottom line
Betterment has maintained its status as the largest independent robo-advisor for a reason: The company offers a powerful combination of goal-based tools, affordable management fees and no account minimum.
Show pros & cons
Pros
No account minimum.
Fractional shares limit uninvested cash.
Robust goal-based tools.
Cons
No direct indexing.
Fees
0.25%
management fee
Account minimum
$0
Promotion
Up to $750
cash bonus with qualifying deposit
The bottom line
This advisor markets itself to women and takes a goal-focused approach that factors in women’s lower incomes, lifetime earnings and longer lifespans. With its $0 account minimum, competitive advisory fees (ranging from 0.25% - 0.5% of assets) and unlimited access to financial advisors (Premium clients can talk to CFPs), Ellevest is an appealing choice for investors of any gender.
Show pros & cons
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
Fees
0.28%
management fee
Account minimum
$25,000
Promotion
None
no promotion available at this time
The bottom line
Charles Schwab brought some heat to the online advisor battle with its Schwab Intelligent Advisory, a hybrid service designed to be a middle ground between the online broker’s financial consultants and its existing robo-advisor, Schwab Intelligent Portfolios.
Show pros & cons
Pros
Access to financial advisors
Wide ETF selection
Automatic rebalancing
Cons
$50,000 account minimum
High cash allocation
Tax-loss harvesting only available on $50,000 or more
Fees
0.30%
management fee
Account minimum
$50,000
Promotion
None
no promotion currently offered
The bottom line
Vanguard Personal Advisor Services is an excellent choice for investors who can meet the $50,000 account minimum and want to use the computer algorithms of a robo-advisor while maintaining access to a human touch.
Show pros & cons
Pros
Low management fee for a hybrid advisor
Larger investment selection
Comprehensive management
Access to financial advisors
Cons
High account minimum
Some clients may incur transaction fees
Best robo-advisor for 401(k) management
Blooom will manage your employer-sponsored retirement plan.
-
NerdWallet editor review
- Trade Commission $10 /month
- Account Minimum $0
- Promotion One month of free management
Most robo-advisors manage IRAs and taxable accounts but leave you in the dark about your 401(k). Blooom attempts to fill that hole. The company charges a flat monthly fee of $10 and focuses on management of employer-sponsored plans like 401(k)s and 403(b)s.
Blooom 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. The industry isn’t completely lacking competition; Vanguard Personal Advisor Services and Personal Capital both offer 401(k) guidance, though not direct management. But Blooom excels in its ability to manage any 401(k), no matter where the account holder works or where the account is held. There’s no need for your employer to have a partnership with the service.
Best robo-advisors: Summary
Robo-Advisor | Best for | Highlights | Annual Fee | Promotion | Account minimum | Start investing |
|---|---|---|---|---|---|---|
 | Overall and taxable accounts | Tax-efficient direct indexing (accounts $100,000+) | 0.25% of account balance | $5,000 managed free (NerdWallet readers) | $500 | |
 | Socially responsible investors | Offers automatic rebalancing; no account fees | 0.40%-0.50% of account balance | $50 cash bonus with qualifying deposit | $0 | |
 | Overall and taxable accounts | Goal-based tools help savings, guide asset allocation | 0.25%-0.40% of account balance | Up to 1 year of free management with qualifying deposit. | $0 | |
 | Portfolio mix | Goal-based tools; unlimited text & email access to a team of financial professionals | 0.25%-0.50% of account balance | Up to a $750 cash bonus with qualifying deposit | $0 | |
Access to a financial advisor | Unlimited access to financial advisors; comprehensive management | 0.28% | n/a | $25,000 | ||
 | 401(k)s | Manages employer 401(k) plans for flat fee | $10 per month | One month free management | $0 | |
 | Portfolio mix and socially responsible investors | Pre-built portfolios; customizable motifs | Commission: $4.95 per share; $9.95 per motif. Automated investing starts at $4.95 per month. | Try Motif Blue for one month free | $0 | |
 | Honorable mention for best overall | Exhaustive list of account types handled | 0.30% on account balances | n/a | $5,000 | |
 | Access to a financial advisor and portfolio mix | Portfolios built on client-by-client basis with advisor | 0.30% of account balance | n/a | $50,000 |
Intelligent Advisory
Our rating 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.
Robo-advisor FAQs
To recap our selections …
Best robo-advisors of 2018
- Wealthfront: Best overall and for minimizing taxes
- Betterment: Best overall and for minimizing taxes
- Wealthsimple: Best for socially responsible investors
- Ellevest: Best for portfolio mix
- TD Ameritrade Essential Portfolios: Honorable mention for best overall
- Motif Investing: Best for portfolio mix and for socially responsible investors
- Vanguard Personal Advisor Services: Best for access to a financial advisor and portfolio mix
- Schwab Intelligent Advisory: Best for access to a financial advisor
- Blooom: Best for 401(k)s
