The bottom line: The robo-advisor from TD Ameritrade charges a 0.30% annual management fee and requires a $5,000 minimum investment. TD Ameritrade also offers a socially aware portfolio.
TD Ameritrade Essential Portfolios
no promotion available at this time
Pros & Cons
Low investment expense ratios.
Competitive management fee.
Niche account types.
High account minimum.
Compare to Other Advisors
per year (approximately)
Up to 1 year
of free management with a qualifying deposit
career counseling plus loan discounts with qualifying deposit
No advisory fees
your first 90 days of Vanguard Digital Advisor investment management (Enrollment requires a Vanguard account with a minimum of $3,000)
Get more smart money moves — straight to your inbox
Become a NerdWallet member, and we’ll send you tailored articles we think you’ll love.
Editor's note: TD Ameritrade was acquired by Charles Schwab in 2020. As part of that transition, TD Ameritrade Essential Portfolios is no longer taking new clients. Existing clients will continue to have access to the service. For alternative options, consult our list of the best robo-advisors.
TD Ameritrade is the behemoth behind one of our top picks for best online brokers. So it’s no surprise that its service for the hands-off set — TD Ameritrade Essential Portfolios — is a competitive player in the ever-expanding world of robo-advisors.
As the name implies, Essential Portfolios focuses on providing just the essentials — a diversified portfolio built with exchange-traded funds. The service’s $5,000 minimum investment requirement puts it at the higher end among peers, but its 0.30% management fee is competitive. Investors who set up recurring deposits can open an account for a reduced minimum of $500.
TD Ameritrade Essential Portfolios is best for:
Large account choice.
Socially conscious investors.
TD Essential Portfolios at a glance
$5,000. Investors who sign up for recurring deposits can open an account with $500.
Account management fee
Investment expense ratios
Full transfer: $75. No fee for a partial transfer.
Portfolio mix is well-diversified but lacks exposure to non-market correlated assets like REITs and commodities.
Socially responsible portfolio option
Socially Aware portfolio available for no extra fee.
• Individual and joint nonretirement accounts. • Roth, traditional, SEP, SIMPLE and rollover IRAs. • Coverdells. • Trusts. • Solo 401(k)s and Solo Roth 401(k)s. • Nonprofit corporation accounts. • Profit-sharing plans. • UGMA/UTMA. • Business accounts with $100,000 minimum (S-corp, C-corp, LLC, partnership, unincorporated) and more.
Free tax-loss harvesting on all accounts.
Annually and on an as-needed basis.
Human advisor option
Bank account/cash management account
Customer support options (includes website transparency)
Phone, email and chat support Monday to Friday 7:30 a.m. to 7 p.m. Central. In-person at branches during regular business hours.
Where TD Ameritrade Essential Portfolios shines
Morningstar-built portfolios: As online brokers have entered the robo-advisory field, some have used their own funds to build portfolios, effectively lining their pockets twice with fund expenses and management fees. TD Ameritrade doesn’t have its own funds, so the funds here are nonproprietary. They were recommended by Morningstar Investment Management, a well-respected investment research and advisory firm. (Morningstar is a NerdWallet advertising partner.)
Morningstar’s guidance here can help investors feel confident that the funds used were chosen because they’re a good fit for the portfolios and risk goals. They also happen to have extremely low expense ratios: Funds carry an average cost of just 0.06%.
Competitive management fee: This is another key fee for investors to compare. TD Ameritrade Essential Portfolios' 0.30% management fee puts it in line with other robo-advisors launched by online brokers: E*TRADE Core Portfolios also charges 0.30%; Fidelity Go's fee — which includes investment expenses — is 0.35% for balances of $50,000 or more (below that threshold, Fidelity is free for balances under $10,000 and $3 per month for balances between $10,000 and $49,999); and Merrill Edge Guided Investing charges 0.45%.
Account choice: This is the longest list of account types we’ve seen from a robo-advisor, including business accounts, which are rarely managed by robo-advisors. No matter what kind of account you’re looking for, Essential Portfolios probably manages it.
Socially Aware portfolio choice: Investors interested in aligning their investment choices with their values will appreciate TD's Socially Aware Portfolios offering as an alternative to the core portfolios. Investments are chosen based on ESG (environmental, social and governance factors) and made up of ETFs composed of companies that score high in those categories. Like the core portfolios, the exact investment mix reflects the client's risk tolerance (conservative, moderate, moderate growth, growth and aggressive).
Thoughtful onboarding process: Like other robo-advisors, Essential Portfolios sends clients through an initial questionnaire to gauge risk tolerance, time horizon and investment goals, which are then used to recommend one of five ready-made portfolios. The series of questions attempts to assess an investor’s general financial picture, asking how many months' worth of income are available in savings and whether you plan to make withdrawals from the portfolio before reaching your goal.
You can also toggle through various portfolio choices, viewing the recommendations for levels of risk tolerance before selecting one. The service then serves up predictions for expected volatility for each portfolio, along with the probability of accumulating various account balances.
Additional investment management services: If you find that the Essential Portfolios tier doesn’t suit your needs, TD Ameritrade offers two additional types of managed portfolios, Selective Portfolios and Personalized Portfolios, each with a higher degree of advisor access.
Where TD Ameritrade Essential Portfolios falls short
High account minimum: For a straight digital robo-advisor, a $5,000 account minimum is on the high end of the spectrum — there are services that require no minimum investment. However, TD Ameritrade does allow investors to open an account with $500 if they set up recurring deposits.
Small portfolios: These are bare-bones portfolios, as the name of the service implies. The funds that are included cover domestic U.S. stocks, international stocks, domestic U.S. bonds and international bonds. These portfolios lack exposure to real estate investment trusts and commodities, asset classes that some other robo-advisors cover.
Is Essential Portfolios right for you?
The field of robo-advisors has gotten crowded in recent years, to the point where many of these services are beginning to look the same. With Essential Portfolios, the pricing (0.30% management fee), service offerings (tax-loss harvesting) and portfolios (low investment expense ratios) are comparable to other services on the market.
A standout feature — what you won’t find at most other robo-advisors — is the exhaustive list of account types. Overall, Essential Portfolios is a solid option for a hands-off digital solution.
Disclosure: The author held no positions in the aforementioned securities at the original time of publication.
Dayana Yochim contributed to this review.
How do we review robo-advisors? Here’s our methodology.
NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. brokers by assets under management, along with emerging industry players, using a multifaceted and iterative approach. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgments on which ones will best meet your needs.
DATA COLLECTION AND REVIEW PROCESS
We collect data directly from providers, and conduct firsthand testing and observation through provider demonstrations. Our process starts by sending detailed questionnaires to providers to complete. The questionnaires are structured to equally elicit both favorable and unfavorable responses from providers. They are not designed or prepared to produce any predetermined results. The questionnaire answers, combined with product demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across more than 20 factors. The final output produces star ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.
Evaluations vary by provider type, but in each case are based upon the weighted averages of factors that include but are not limited to: advisory and account fees, account minimums and types, investment selection, investment expense ratios, trading costs, access to human financial advisors, educational resources and tools, rebalancing and tax minimization options, and customer support including branch access, user-facing technology and mobile platforms.
Each factor can involve evaluating various sub-factors. For instance, when gauging the investment selections offered by robo-advisors, 80% of the score is based on the potential for diversification (how well-diversified a resulting portfolio of investments could be) combined with the availability of specialty portfolios and level of customization for investors. Expense ratios form an additional 10% of the score, and low or no management fee the remaining 10%.
The weighting of each factor is based on our team’s assessment of which features are the most important to consumers and which ones impact the consumer experience in the most meaningful way. The factors considered, and how those factors are weighted, change depending upon the category of providers reviewed.
Writers and editors conduct our broker reviews on an annual basis but continually make updates throughout the year. We maintain frequent contact with providers and highlight any changes in offerings.
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 on a daily basis. In addition to 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.
The combined expertise of our Investing team is infused into our review process to ensure thoughtful evaluations of provider products and services from the customer perspective. Our writers and editors combine to have more than 70 years of deep experience in finance, ranging from a former Wall Street Journal reporter to a former senior financial advisor at Merrill Lynch.
CONFLICTS OF INTEREST
While NerdWallet does have partnerships with many of the reviewed providers, we manage potential conflicts of interest by maintaining a wall between our content and business operations. This wall is designed to prevent our writers and the review process from being influenced or impacted by our business partnerships. This way, all reviews can provide an unbiased review that serves the interests of our users. For more information, see NerdWallet’s editorial guidelines.