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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.

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 for yet another year they remain the best options for most investors, 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.

Wealthfront and Betterment share the same fee, to an extent: Both services charge 0.25%. Wealthfront manages $10,000 of every account balance for free, which makes that service slightly less expensive overall (assuming you’re not carrying around a balance over $2 million — Betterment waives fees on that portion of an investor’s balance). But Betterment gives customers access to a team of financial advisors through in-app messaging with its basic service, and more robust access (messaging and phone) for an additional charge (0.40%) through Betterment Premium. Betterment Premium requires a minimum balance of $100,000, however.

Both robo-advisors have unveiled some intriguing new offerings in recent months. Wealthfront now offers robust financial planning tools and a lending service, in which customers with $100,000-plus invested can borrow against their account. Meanwhile, Betterment added a charitable giving option for customers to donate appreciated investments to philanthropic causes in a tax-efficient fashion.

TD Ameritrade Essential Portfolios gets a nod as an honorable mention. While not a winner of any specific category, the robo-advisor is an all-around solid option. That’s thanks to a competitive management fee of 0.30%, low investment expense ratios, Morningstar-built portfolios and an exhaustive list of account types not handled by other robo-advisors.

Best robo-advisors for socially responsible investors

These advisors offer access to SRI portfolios. 

Robo-advisors used to overlook the needs of socially responsible investors, but no more: Slowly they’re adding SRI portfolios to their offerings for investors who want to align those portfolios with their values. Leading the pack is Wealthsimple, which offers a portfolio of six socially responsible ETFs, including exposure to bonds. Wealthsimple’s management fees are the same for SRI and non-SRI portfolios, though the expense ratios on the SRI investments do run higher on average.

Meanwhile, Motif Investing‘s signature feature — hyper customizable small-scale funds composed of up to 30 stocks or ETFs called “motifs” — is perfect for socially responsible investors. The company has simplified its SRI offerings into three automated portfolios: sustainable planet, fair labor and good corporate behavior. But the options don’t end there, as customers can screen for specific characteristics or filter out others.

Best robo-advisors for portfolio mix

These advisors offer access to diversified and customizable options. 

Much of the appeal of robo-advisors is they simplify the investing process on your behalf. But that doesn’t mean you need to settle for simple portfolios or one-size-fits-all investment options. It’s possible to have the best of both worlds: A hands-off approach with access to diversified portfolios tailored to your specific goals.

Ellevest, a relative newcomer to this industry, has set itself apart from the crowded field. Clients can establish multiple goals (with associated time frames) and then Ellevest builds customized portfolios by choosing from 21 ETF classes, more than what leading players Betterment and Wealthfront offer. As clients near their goal, Ellevest automatically changes target allocations or will rebalance, as necessary, if a portfolio veers too much from the target allocation.

Motif Investing offers the ultimate flexibility and an array of investments, including individual stocks, ETFs and fractional shares. The company’s signature motifs, customizable small-scale funds of up to 30 stocks or ETFs, are its standout feature. Customers can choose from a catalog of pre-built motifs, create one from scratch or tailor an existing motif.

Finally, Vanguard Personal Advisor Services builds portfolios primarily using its own funds, which carry some of the lowest expense ratios available. Index funds represent the core of most portfolio holdings, but clients also have access to actively managed funds, a money market fund and tax-exempt funds.

Best robo-advisors for taxable accounts

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

One reason Wealthfront and Betterment rise to the top is because they offer superior tax optimization services beyond tax-loss harvesting, which is somewhat commonplace. Such benefits apply to customers with taxable accounts, like individual or joint nonretirement accounts, especially those with high balances.

Wealthfront stands out by offering direct indexing, which is available to customers with balances of $100,000 or more. This service buys individual securities rather than index funds or exchange-traded funds, zeroing in on tax-loss harvesting opportunities. For customers with taxable account balances of $500,000 or more, there’s another option: Advanced indexing. Here, the robo-advisor weights stocks in a portfolio based on various factors to further power potential returns.

Betterment (like all of the other robo-advisors NerdWallet analyzed) can’t compete on direct indexing, but it has made strides to bridge this gap. The company’s Tax-Coordinated Portfolio is a strategy that automatically puts tax-efficient investments into taxable accounts and investments that have a heavy tax burden into tax-advantaged accounts that will shelter them. The company says this strategy can increase annual after-tax returns by an average of 0.48%, though it works only for clients with both taxable and tax-advantaged retirement accounts.

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 completely 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 Charles Schwab Intelligent Advisory. Not to be confused with Charles Schwab Intelligent Portfolios mentioned above, Intelligent Advisory is a more human-enabled online advice offering.

Both Vanguard and Schwab Intelligent Advisory have relatively high minimum investments — $50,000 and $25,000, respectively — but offer personal service with access to financial advisors. Schwab’s promise of unlimited access to a team of certified financial planners, who are available by appointment for phone and video chats, comes with a management fee of 0.28%. Schwab may be a latecomer to this industry, but it’s intensified the competition, having slightly undercut Vanguard’s 0.30% management fee.

Both services offer unlimited access to certified financial planners, an advantage over other hybrid advisors that typically employ registered investment advisors. Clients with balances above $500,000 may prefer Vanguard, as that level of assets gains them access to a dedicated financial advisor rather than a team of advisors.

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

Annual Fee
Account minimum
Start investing
and taxable accounts
Tax-efficient direct indexing (accounts $100,000+)
0%-0.25% of account balance
$15,000 managed free (NerdWallet readers)
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.
Socially responsible investors
Offers automatic rebalancing; no account fees
0.40%-0.50% of account balance
$50 cash bonus with qualifying deposit
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
TD Ameritrade Essential Portfolios
mention for best overall
Exhaustive list of account types handled
on account balances
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
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
Schwab Intelligent Advisory
Access to a financial advisor
Unlimited access to financial advisors; comprehensive management
Manages employer 401(k) plans for flat fee
per month
One month free management

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.


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.


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.

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