DollarGeek Presents:

Best Robo-Advisors of October 2021

DollarGeek's goal is to help you make the best financial decisions. To help us do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations or ratings.

A robo-advisor is an online, automated portfolio management service. These companies rely heavily on computer algorithms, which are a set of rules to choose appropriate investments based on your risk tolerance and time horizon. Many people choose to use robo advisors because they can offer these types of services for a fraction of the cost of a human financial advisor.

Robo Advisors lower-cost management fee, combined with important features like automatic portfolio rebalancing and tax-loss harvesting, can translate into higher net returns for investors. Learn more about the best robo-advisors and how these leading technology platforms can help you manage your money.

Showing 1-9 of 9 accounts
OVERALL RATING:
(4.5)
on M1 Finance's website

Minimum

$0

to open account

Fee

0.00%

management fee

Promotion

None

no promotions at this time

Minimum

$0

Fee

0.00%

management fee
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OVERALL RATING:
(5)
on Wealthfront's website

Minimum

$500

to open account

Fee

0.25%

management fee

Promotion

5,000

managed for free when signing up

Minimum

$500

Fee

0.25%

management fee
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OVERALL RATING:
(4.5)
on Ellevest's website

Minimum

$0

to open account

Fee

0.25%

management fee

Promotion

$750

max cash bonus with qualifying deposit

Minimum

$0

Fee

0.25%

management fee
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OVERALL RATING:
(5)
on SoFi's website

Minimum

$0

to open account

Fee

0%

management fee

Promotion

Discounts

on loans if your'e a member

Minimum

$0

Fee

0%

management fee
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OVERALL RATING:
(5)
on Acorns' website

Minimum

$0

to open account

Fee

$1 - $2

per month

Promotion

Free

for up to 4 years while in college

Minimum

$0

Fee

$1 - $2

per month
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OVERALL RATING:
(4.5)
on Blooom's website

Minimum

$0

to open account

Fee

$10

per month

Promotion

1 month

of free management

Minimum

$0

Fee

$10

per month
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OVERALL RATING:
(4)
on SigFig's website

Minimum

$2,000

to open account

Fee

0.25%

management fee

Promotion

First $10K

managed for free

Minimum

$2,000

Fee

0.25%

management fee
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OVERALL RATING:
(4.5)
on Wealthsimple's website

Minimum

$0

to open account

Fee

0.4% - 0.5%

management

Promotion

$1,000

cash bonus with a qualifying deposit

Minimum

$0

Fee

0.4% - 0.5%

management
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OVERALL RATING:
(5)
on Betterment's website

Minimum

$0

to open account

Fee

0.25%

management fee

Promotion

Waived

management fee for 1 year with qualifying deposit

Minimum

$0

Fee

0.25%

management fee
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Best robo-advisors at a glance - October 2021

For the hands-off investor, choosing a robo-advisor can be a wise decision. The best robo-advisor will give you a robust platform, low cost management fees, and a large selection of investment strategies to pick from.

Provider

Account Minimum

Management Fee

Favorite Perk

Visit

$2,000

0.25%

Compatibility

$500

0.25%

Interest on cash

$0

0.25%

Cash management

$100

0%

Borrowing power

$0

0.25%

Socially responsible investing

$500

0.25%

No management fee

$0

0.4% - 0.5%

Free tax loss harvesting

$0

$1 - $2/month

Automate savings

$0

$10/month

401K efficiency

Best for getting your first $10K managed for free

(4.0)

on SigFig's website

Overview

SigFig is a robo-advisor that helps investors create diversified, tax-efficient investment portfolios. In the expanding automated investing industry, SigFig differentiates itself by offering free investment management for the first $10,000. Additionally, the robo-advisor provides unlimited access to a financial advisor.

Investors can start by providing details about their investment goals, age, risk-related information, and monthly contributions. SigFig creates a personalized investment portfolio using these details, comprising low-cost ETFs.

SigFig provides free management of up to $10,000, portfolio tracking and analysis, and access to financial advisors to all customers. If your portfolio crosses $10,000, you’ll pay 0.25% management charges on any amount exceeding $10,000.

In addition to automated investment management, SigFig offers portfolio rebalancing, dividend reinvestments, and tax-reduction strategies.

What We Like

  • Free management of the first $10,000
  • Portfolio rebalancing, dividend reinvesting, and tax-reduction advice
  • Access to human advisors

Areas to Watch Out for

  • Requires a minimum of $2,000 to open an account
  • Lacks a cash management account

Best for those who want advanced solutions and tools

(5.0)

on Wealthfront's website

Overview

Wealthfront is one of the earlier entrants in the automated investing realm, which has given the robo advisor a head start in diversifying its offerings. At the moment, Wealthfront provides automated investing, an online checking account, and a line of credit facility as its primary products.

With our primary focus on Wealthfront’s automated investing, you can open an account with $500. Wealthfront offers personalized portfolios based on your investing goals and risk appetite. The robo advisor invests in low-cost ETFs, along with the add-on feature of rebalancing it for optimal results. Wealthfront provides tax-loss harvesting with every account. It has annual advisory fees of 0.25%.

For investors with higher balances ($100k+ and $500k+), Wealthfront introduces stock-level tax-loss harvesting, risk parity solutions, and Smart Beta for in-depth investing strategies (above $500k).

In addition to its automated investing arm, Wealthfront offers an online checking account with an APR of 0.35%. There are no account management charges, overdraft charges, or account minimums, along with a vast ATM network. Wealthfront also offers a line of credit against portfolios, with an APR of 2.40% to 3.65%.

Wealthfront provides smart money management tools, including goals creation, automatic transfers, bill payments, and similar personal finance tools.

What We Like

  • Daily tax-loss harvesting
  • Advanced solutions for higher account balances
  • Full-fletched online checking account
  • Personal finance tools

Areas to Watch Out for

  • No discounts in management fees for large accounts

Best for those who also want a cash and savings account

(5.0)

on Betterment's website

Overview

Betterment is one of the first robo advisors to come into the picture. The automated investment firm has over $22 billion in assets under management. Betterment has diversified its offerings, including an investment service, a checking account, and an online savings-type account.

Betterment uses Modern Portfolio Theory to create personalized portfolios for users based on their investment goals. Betterment allows investors to list multiple goals. The robo advisor provides tailored investment recommendations for these goals. It offers two investment management plans, Digital (0.25%) and Premium (0.40%).

Betterment claims that its investors earn 38% more than average investors over a period of 30 years. The robo advisor provides IRA and 401k retirement accounts. Investors can seek financial advice from a CFP® for a one-time fee.

Betterment investment solutions come with auto-investments, portfolio rebalancing, and advanced tax-saving strategies. Its Premium plan offers advice for investments held outside of Betterment.

Betterment offers a free online checking account, with a debit card, FDIC insurance, and ATM or foreign fees reimbursement. Its savings solution offers an APR of 0.40%, much higher than what most traditional banks offer.

What We Like

  • Higher average returns as per Betterment’s analysis
  • Access to online checking and savings account

Areas to Watch Out for

  • Higher fees for the premium plan

Best for those who are not active traders

(4.5)

on M1 Finance's website

Overview

M1Finance is a robo advisor that aims at offering consistent returns through automated investment strategies. Unlike what we witnessed in most cases, M1Finance offers a free investment platform with the option to open a checking account and even borrow against your portfolio.

Like most robo advisors and automated investing platforms, M1Finance uses Modern Portfolio Theory for portfolio allocations. Its portfolios comprise both stocks as well as low-cost ETFs. M1 Plus account (paid account) offers more flexibility in terms of trading windows for investors holding over $25,000.

M1Finance allows investors to borrow against their portfolio at an APR of 3.5% for the free account and 2% for the Plus account. Additionally, M1Finance users can open an online checking account with a debit card that works similar to any traditional checking account.

M1 Plus account offers some additional benefits over its free version, including 1% interest on checking account balance, along with 1% cashback on spends, lower APR on a line of credit, ATM fee reimbursement, and smart money management (transfers) services. Smart Transfers allow investors to move their funds in and out of their investment and checking account held with M1Finance based on rules set by the account holder.

What We Like

  • A one of its kind free investment account
  • Ability to borrow against investments
  • Cashback on checking account spends

Areas to Watch Out for

  • Not an ideal solution for active traders

Best for those who want to select specific services a la carte

(4.5)

on Ellevest's website

Overview

Ellevest is an automated advisor designed with women in mind. It uses investment algorithms that factor-in important life events, pay gaps, and longer life span for women. Although, Ellevest provides its investment services to all the customers as of now.

Ellevest has a membership-based model, including Essential ($1/mo), Plus ($5/mo), and Executive ($9/mo) membership. Irrespective of their membership levels, all Ellevest customers get access to personalized investment portfolios, banking services (Spend and Save accounts), learning material, and discounted one-to-one sessions with financial planners.

Ellevest Plus account offers retirement solutions, in addition to all Essential Plan features, comprising personalized savings recommendations and IRA transfer or rollover assistance. Ellevest Executive plan adds goal-based investing, along with all the features of Plus account. You can choose up to six different goals and start saving, investing in separate accounts.

Ellevest is the only automated advisor that considers pay gaps, breaks, and longer life spans for women in its portfolio recommendations.

There are no fund management charges for any membership levels with Ellevest, helping it stand out of the league.

What We Like

  • No asset management charges (covered in membership fees)
  • Only robo advisor designed with women in mind (factoring milestones, pay breaks in portfolio recommendations)
  • Discounted access to financial advisors

Areas to Watch Out for

  • Essential members cannot open an IRA

Best for those who want a membership and tech savvy tools

(5.0)

on SoFi's website

Overview

SoFi is one of the most popular names in the American fintech industry. It offers automated investing under SoFi Invest. Its investment solutions include automated investing, goal-based investment solutions, and retirement investing.

You can open an investment account with SoFi for as little as $1. SoFi takes a slightly different approach to automated investing by providing access to human financial advisors. SoFi provides a goal-based investing feature. Its platform users can pick a financial goal and receive investment recommendations accordingly.

SoFi creates portfolios using index funds and low-cost ETFs. SoFi offers automatic rebalancing for achieving desired investment returns for investors.

Apart from its investment services, SoFi users get access to specific member benefits, such as unlimited one-to-one financial counseling, career advice, and rate discounts on other SoFi products.

What We Like

  • Access to SoFi member benefits (career advice, financial advice, rate discounts)
  • Invests in low-cost ETFs only.

Areas to Watch Out for

  • Lacks tax-loss harvesting

Best for no minimums and low pricing

(5.0)

on Acorns' website

Overview

Acorns is widely known as a micro-savings app. The micro-savings app has transformed itself into a smart investment platform, online bank, and retirement solutions provider.

Acorns provides automated investing solutions using Modern Portfolio Theory. You can create an account within 5 minutes and start investing your spare change. Acorns requires its users to answer questions about their financial goals, risk profile, and creates a portfolio accordingly.

There are no minimum investment requirements with Acorns. You can start at $1 per month or $3 per month with no additional management charges. Acorns offers different membership plans, including Lite ($1/mo), Personal ($3/month), and family ($5/mo) plans.

Acorns also provides retirement investing solutions, including retirement accounts and investment advice. Its Early feature allows parents to open investment accounts for their children. Acorns also provides an online checking account with a debit card and no account management fees.

What We Like

  • No account minimums
  • Ability to invest spare change
  • Educational material for platform users

Areas to Watch Out for

  • No tax-loss harvesting
  • No human advisors

Best for 401(k) management

(4.5)

on Blooom's website

Overview

Blooom is a robo advisor that targets employer-sponsored retirement plans. Unlike other robo advisors on our list, Blooom aims at managing your defined-contribution plans (401k, 401a, 403b, 457) better.

Blooom offers a free analysis of retirement plans to every platform user or potential customer. Blooom analysis takes into account the retirement goals of an individual and matches them against their current investments. The platform offers its recommendations accordingly.

In terms of signing up, it takes only a couple of minutes to sign-up with Blooom. Once your account is linked, Blooom provides personalized portfolios, places trades, provides withdrawal alerts, and gives access to financial advisors.

Blooom offers three different membership plans, including Essentials ($45), Standard ($120), and Unlimited ($250) plans. Blooom has a handful of personal finance tools available for its platform users.

What We Like

  • Blooom targets defined-contribution plans, filling a much-needed gap.
  • Plenty of personal finance tools
  • Access to financial advisors

Areas to Watch Out for

  • Expensive for beginner investors
  • No option to change investments

Learn About The Best Checking Accounts

A robo-advisor is an automated investment advisor that uses algorithmic principles for creating financial portfolios for clients. Most of the robo-advisors use modern portfolio theory to minimize portfolio risk without compromising on investment returns. Here is a list of popular robo-advisors.

  • Wealthfront
  • Ellevest
  • SoFi
  • Acorns
  • Blooom
  • Sigfig
  • Wealthsimple
  • Betterment
  • M1 Finance
  • A robo-advisor asks about your financial goals, investment period, and risk profile through a questionnaire.
  • Robo-advisor uses your answers to create a portfolio with different financial products.
  • Most of the robo-advisors use ETFs, index funds for achieving desired results for investors.
  • Check portfolio management fees.
  • Identify minimum investment requirements and the difference between premium/standard packages.
  • Find out if the robo-advisor offers customer support.
  • Check if there are any promotions for managing deposits free (up to $10,000).
  • Compare other robo-advisors in the market.

Robo advisors are a good option for individuals with limited investment capital.

  • Start investing with as little as $100.
  • Say goodbye to high fund management fees with robo advisors.
  • Access to additional benefits, such as tax-loss harvesting, dividend reinvestment.
  • Invest through Roth IRAs or 401K’s.

Robo advisors are algorithmically-driven investment platforms that provide investors access to professional money management. A careful analysis of the returns offered by current robo advisors indicates that investors can generate competitive returns through these investments.

The number of robo advisors in the market is growing exponentially, with traditional players offering similar products to their customers. Some of the most popular robo advisors in the market are:

  • Wealthfront
  • Ellevest
  • SoFi
  • Acorns
  • Blooom
  • Sigfig
  • Wealthsimple
  • Betterment
  • M1 Finance

Robo-advisors uses the principles of modern portfolio theory to create investment portfolios for their users. Robo-advisors take into account the investment period, financial goals, and the risk appetite of the user while creating a portfolio.

One of the primary benefits of robo-advisors is their ability to make investment decisions without letting emotions in the way. They use algorithms to create, maintain, and readjust portfolios.

Robo-advisors offer cost-efficient professional investment management services. Here is a list of some of the most popular robo-advisors and their fees.

  • Wealthfront (0.25%)
  • Ellevest (0.25%)
  • SoFi (0.25%)
  • Acorns ($1 to $2/month)
  • Sigfig (0.25%)
  • Wealthsimple (0.40% to 0.50%)
  • Betterment (0.25%)
  • M1 Finance (0)

Unlike the early days of the robo advisory industry, the market has several new robo advisors offering investment advice at a fraction of the cost of traditional financial managers. Some of the best robo advisors are:

  • Wealthfront
  • Ellevest
  • SoFi
  • Acorns
  • Blooom
  • Sigfig
  • Wealthsimple
  • Betterment
  • M1 Finance

Unlike the early days of the robo advisory industry, the market has several new robo advisors offering investment advice at a fraction of the cost of traditional financial managers. Some of the best robo advisors are:

  • Wealthfront
  • Ellevest
  • SoFi
  • Acorns
  • Blooom
  • Sigfig
  • Wealthsimple
  • Betterment
  • M1 Finance

Unlike the early days of the robo advisory industry, the market has several new robo advisors offering investment advice at a fraction of the cost of traditional financial managers. Some of the best robo advisors are:

  • Wealthfront
  • Ellevest
  • SoFi
  • Acorns
  • Blooom
  • Sigfig
  • Wealthsimple
  • Betterment
  • M1 Finance

Robo advisors use computer programs (algorithms) to create investment portfolios, which means they do not suffer from emotional bias or analysis paralysis when making investment decisions. Robo advisors offer:

  • Low management fees
  • Low minimum deposits
  • Custom portfolios for individual investors.

While the entire investment community is in awe of robo advisors, very few have discussed the limitations of investing with robo advisors.

  • Lack of investment discretion
  • Little control over portfolio composition
  • Miss on high-risk, high-reward investment opportunities
  • Limited customer interaction

When it comes to choosing between a financial advisor and a robo advisor, you have to consider investment requirements, fund management fees, and add-on features. Robo advisors excel in lowering investment requirements and management charges but lack a personal touch that many investors prefer.

There are no guarantees that robo advisors will beat the market. Most robo advisors invest in index funds and ETFs that can offer returns closer to the overall market returns, but they are unlikely to beat it. Additionally, that’s not the goal why robo advisors were created in the first place.

Robo advisors offer several advantages over traditional financial advisors, but they do have some disadvantages and limitations. Robo advisors do not offer investment choices and instead invest in a mix of index funds and ETFs.

Benefits of robo advisors

  • Low investment requirements
  • Lower fund management charges
  • Tax-loss harvesting, dividend reinvestment

Drawbacks of robo advisors

  • Limited investment options
  • No control over investment choices

Other helpful resources