Advertiser Disclosure

Best Robo-Advisors: 2018 Top Picks

Advisors, Investing

NerdWallet offers financial tools and advice to help people understand their options and make the best possible decisions. The guidance we offer and info we provide are deeply researched, objective and independent.

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

NerdWallet rating

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.

Reader favorite

Cons

  • No fractional shares.

  • No large-balance discounts.

Read full review
NerdWallet rating

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

Reader favorite

Cons

  • Higher account management fees

  • Limited free-management promotion

  • Limited personal finance tools

Read full review
NerdWallet rating

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.

Reader favorite

Cons

  • No direct indexing.

Read full review
NerdWallet rating

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

Reader favorite

Cons

  • Few accounts supported

  • No tax-loss harvesting

Read full review
NerdWallet rating

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

Read full review
NerdWallet rating

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

Read full review

Best robo-advisor for 401(k) management

Blooom 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). 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
Wealthfront
Wealthfront
Overall
and taxable accounts
Tax-efficient direct indexing (accounts $100,000+)
0.25% of account balance
$5,000 managed free (NerdWallet readers)
$500
Wealthsimple
Wealthsimple
Socially responsible investors
Offers automatic rebalancing; no account fees
0.40%-0.50% of account balance
$50 cash bonus with qualifying deposit
$0
Betterment
Betterment
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
Ellevest
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
Schwab Intelligent Advisory
Access to a financial advisor
Unlimited access to financial advisors; comprehensive management
0.28%
n/a
$25,000
Blooom
Blooom
401(k)s
Manages employer 401(k) plans for flat fee
$10
per month
One month free management
$0
motifinvesting
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
TD Ameritrade Essential Portfolios
Tdameritrade.com-promotions
Honorable
mention for best overall
Exhaustive list of account types handled
0.30%
on account balances
n/a
$5,000
Vanguard Personal Advisor Services
Vanguard Personal Advisor Services
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

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

Robo-advisors use computer algorithms to offer a low-cost, automated way to manage your investments, whereas an online brokerage account will give you full control over all your investment decisions, including the types of assets you want to trade and how frequently. When deciding between a robo-advisor and a traditional online brokerage account, the decision largely comes down to how actively involved you want to be in the selection of your individual investments.

The appeal of robo-advisors is their low-cost fee structure. While annual management fees are the primary cost (typically assessed as a percentage of the assets you have invested with an advisor each year), you’ll also pay expense ratios with most robo-advisors. These fees are charged by the funds that oversee the investments used by the robo-advisor — think mutual funds, index funds and exchange-traded funds. In addition, account maintenance fees (like outgoing transfers) may also exist.

Yes, all of NerdWallet’s picks for best robo-advisors allow free incoming transfers from another account. But each robo-advisor has its own specifications for how to transfer money to your account. Note: You probably will be charged a fee by the company from which you’re transferring funds.

Robo-advisors simplify the investing process for investors by providing the following benefits:

  • Automated and hassle-free assembly of a diversified portfolio aligned with your goals and risk tolerance
  • Lower costs than traditional human advisors
    Regular portfolio rebalancing, either automatically or at set intervals
  • Financial planning tools
  • At some providers, tax-loss harvesting and other tax-efficient strategies

Once you’ve gathered the necessary materials (such as your Social Security or tax ID number, address, annual income and date of birth), you should be able to open your robo-advisor account in less than an hour. Be sure to allow sufficient time to answer an onboarding questionnaire, as this is designed to identify your risk tolerance, goals and investing preferences.

The holdings in your account (cash and securities) are insured up to $500,000 in the event the company goes out of the business, provided it’s a member of the Securities Investor Protection Corporation. All of NerdWallet’s picks for best robo-advisors are members of the SIPC either directly or through a partner brokerage. Like any type of investing, there are inherent risks when it comes to investing money with robo-advisors — the value of your portfolio can decrease and may even fall sharply at times.

Yes, all of NerdWallet’s picks for best robo-advisors manage retirement accounts. These accounts offer tax advantages for contributions, but they also have rules about how much you can contribute and when, and how you can take distributions.

Based upon the answers to a questionnaire you fill out during the onboarding process, you’ll be offered a range of portfolio choices, ranging from conservative to aggressive. Most robo-advisors use low-cost index funds and ETFs to build their portfolios, though the level of diversification and customization can vary widely between providers.

 

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

About the authors