Ratings Methodology for Online Financial Advisors

NerdWallet’s overall ratings for online financial advisors are weighted averages of ratings in the following larger categories:
  • Advisor access and credentials.
  • Services offered.
  • Account fees.
  • Portfolio construction.
  • Expense ratios.
  • Account minimum.
  • Customer support options.

  • Data collection and review process

    NerdWallet reviews eight companies that either provide financial planning services online or connect users with a financial advisor. This category does not cover wealth management services offered by brokerages or banks. It does include several robo-advisors that offer clients access to human advisors as a premium upgrade.

    We collect data from providers, do first-hand testing and observe provider demonstrations when necessary. Our process starts by sending detailed questionnaires to providers. The questionnaires are structured to equally elicit both favorable and unfavorable responses. They are not designed or prepared to produce any predetermined results. The questionnaire answers, combined with product demonstrations, interviews of provider personnel and hands-on research by our specialists, make up our proprietary assessment process that scores each provider’s performance across more than 20 factors. The final output produces star ratings from poor (1 star) to excellent (5 stars). Ratings are rounded to the nearest half-star.

    Information updates

    Our writers and editors conduct broker reviews on an annual basis. Throughout the year, we maintain contact with providers and update any changes to their offerings.

    Factor weightings

    The weighting of each rating factor is based on our team’s assessment of which features are most important to consumers and which ones impact the consumer experience in the most meaningful way. Those factors vary depending on the category.

    The review team

    The review team comprises seasoned writers, researchers and editors who cover stocks, bonds, mutual funds, index funds, exchange-traded funds, alternative investments, socially responsible investing, financial advisors, retirement, and investment strategy. In addition to appearing on NerdWallet, the work of our team members has been published in The New York Times, The Washington Post, Forbes, USA Today, Bloomberg News, Nasdaq, MSN, MarketWatch, Yahoo Finance and other national and regional media outlets. Each writer and editor follows NerdWallet’s strict guidelines for editorial integrity.

    The combined expertise of our investing team is infused into our review process to ensure thoughtful evaluation of products and services from the customer perspective. Our writers and editors together have more than 70 years of experience in writing about finance. Their former positions range from Wall Street Journal reporter to senior financial advisor at Merrill Lynch.

    Advisor credentials

    This category analyzes the following:

  • Contact methods: If the financial advisor offers in-person, video, chat or text, phone and email communication, the provider earns the highest rating. If it offers email or chat/text only, it earns the lowest rating.
  • Credentials: If all of a provider’s advisors are certified financial planners, it earns the highest rating. If a provider’s advisors are brokers (series 65 or related only), it earns the lowest rating.
  • Advisor access and relationship: If a provider offers a dedicated advisor for each client, with formal scheduled check-ins and unlimited access, it earns the highest rating. If a provider offers a team of advisors, but access is limited, it earns the lowest rating.
  • Services offered

    For this category, we consider the following from each provider:

  • Financial planning services offered: If an online financial advisor can do everything a traditional in-person advisor would (basic estate plans, business planning, tax planning, debt reduction, etc.), it earns the highest rating. If an online financial advisor offers very basic financial planning advice, it earns the lowest rating.
  • Options for where accounts can be held: If a provider will manage accounts at any brokerage, it earns the highest rating. If customers must move money to the provider’s brokerage or custodian, it earns the lowest rating.
  • Types of accounts managed: If a provider will directly manage a variety of accounts, including workplace plans and specialty accounts, it earns the highest rating. If it will directly manage only a small selection of accounts (for example, taxable only), it earns the lowest rating.
  • Tax strategy: If a provider offers direct indexing or another specialized tax strategy, it earns the highest rating. If it offers no tax strategy, it earns the lowest rating.
  • Fees

    This category takes into account the following:

  • Account management, planning or subscription fees: If a provider charges 0.30% or less (or a base flat fee of up to $250) annually, it earns the highest rating. If it charges more than 1% (or a base flat fee of more than $1,000) annually, it earns the lowest rating.
  • Account fees for transfers, closures or trades: If a provider charges no fees for transfers, closures or trades, it earns the highest rating. If a provider’s transfer, closure or trade fees add up to more than $250, it earns the lowest rating.
  • Setup or onboarding fees: If a provider charges no setup or onboarding fees, it earns the highest rating. If it charges more than $600 for setup or onboarding, it earns the lowest rating.
  • Portfolio construction

    If a provider offers customization on a client-by-client basis, with the option to include any investment available through brokerages, it earns the highest rating. If it offers p​​re-built portfolios and limited choices, it earns the lowest rating.

    Expense ratios

    Expense ratios We consider the expense ratios charged by the investments used in portfolios built by the financial advisors. If those expense ratios average 0.10% or less, a provider earns the highest rating. If those expense ratios average more than 0.30%, a provider earns the lowest rating.

    Account minimum

    We consider the dollar amount required to open an account or get management from the financial advisor. If a provider’s account minimum is $10,000 or less, it earns the highest rating. An account minimum of $250,000 or more earns the lowest rating.

    Customer support

    We consider the following:

  • Customer service availability: If a provider has 24/7 customer service, it earns the highest rating. If it has no phone support and only offers assistance via email or chat, it earns the lowest rating. For providers that connect customers to financial advisors, this rating is based on the provider’s customer service availability, not that of the financial advisors.
  • Website usability: We define website usability as how easy it is for our reviewers to find key details on the provider’s site. If we can find all information in under five minutes, a provider earns the highest rating. If we can’t find any information, the provider earns the lowest rating.


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