You’re already investing, but now it’s time to take it to the next level: hands-free investing that makes you money without you even worrying about it.
Sounds too good to be true, and until recently, it was. Robo-advisors run rampant (and make a good return for investors), so why shouldn’t you hop on the money-making bandwagon?
We found the best robo-advisors for automated investing portfolios that help your money make you more money. These managed portfolios are constantly improving and allowing for better returns.
It’s time to find out which one is right for you, so let’s get into the reviews.
Betterment offers the best pricing structure, lowest number of negative attributes, and is overall the most transparent company on this list. Their services are unmatched for long-term, financially conservative gains.They are my #1 recommended choice after researching over a dozen robo-advisors.
Best Robo-Advisors
- Betterment - Best Overall
- M1 Finance - Lowest Fees
- SoFi Automated Investing - Best Trading App
- Personal Capital - Best for Larger Accounts
- Acorns - Best for Smaller Accounts
- Blooom - Best for Retirement Accounts
- Wealthsimple - Best for Canadians
- Stash - Best for New Investors
- Titan - Best Investment Experts
Summary of Best Robo-Advisors of May 2022
Best Overall
Lowest fees
Best Trading App
Best for Larger Accounts
Best for Smaller Accounts
Best for Retirement Accounts
Best for Canadians
Best for New Investors
Best Investment Experts
Methodology
We chose robo-advisor companies based on a myriad of factors, including: customer services, average returns, portfolio customization, options, and the overall status of the company.
There are plenty of robo-advisor programs that have come and gone, risen and fallen, which is why we curated a list that speaks with authority and showcases the absolute best companies out there.
We meticulously reviewed privacy policies, average YoY returns, and additional financial information in order to bring you the very best robo-advisor services out there.
1. Betterment - Best Overall
Betterment is the all-around best choice for conservative, high-volume growth with the lowest possible risk. Their robo-advisor option allows you to pick how you want to invest as well, so you’re not just mindlessly investing in as many index funds as possible.
While Betterment does have a Premium program, it’s not necessary unless you scale up to $100K in ETFs, and their other fees make you feel like you’re getting away with robbery.
As the best choice for new investors, seasoned investors, and anyone who wants to plan for their financial future but doesn’t know how to, Betterment is the ultimate solution.
2. M1 Finance - Lowest Fees
M1 Finance is a name we all know and trust, and their zero-commission program just makes us love them even more. You don’t pay commissions on trades at all.
While they do have margin trading and additional financial products, robo-advisor specific customers will benefit the most. Unfortunately, there is no tax-loss harvesting available through them, and they don’t utilize external data to make their robo-advisors better, only internal M1 Finance data.
Overall they’re an excellent service that can help you save money while putting the money that you do have to work for you, with maximum returns.
3. SoFi Automated Investing - Best Trading App
SoFi is perhaps one of the most accessible automated investing platforms, with a stellar app that comes with proper access to every single feature you need.
While they don’t offer certain features like tax-loss harvesting, they do include auto rebalancing and access to certified financial planners.
The only major pain point from this otherwise-stupendous service is their lack of transparency with personal information collection and distribution.
4. Personal Capital - Best for Larger Accounts
Built with a barrier to maintain a tight-knit circle of $100k+ clients, Personal Capital grants access to private equity opportunities for you to invest in that others don’t get access to.
It’s the kind of access that requires exclusivity, but with that kind of money also comes high fees to maintain the private advisors you have listed on your account.
While it has an amazing robo-advisor program, plus net worth tracking, some aspects of Personal Capital can feel restrictive and pricey.
5. Acorns - Best for Smaller Accounts
Acorns has a unique service to help you invest your spare change so that it’s completely automatic. This means you can expect hundreds of investments per year, and while it’s not a lot, it does more for you.
Acorns help you build the habit of investing so it becomes familiar to you. While they help you invest and make those good choices, you’re investing in ETFs that they control.
You can’t direct invest, so they choose which ETFs are being bought. You can imagine there’s some kind of arrangement for guaranteed investments, and while it reduces your control, you’re still getting solid investments out of it.
6. Blooom - Best for Retirement Accounts
Blooom has excellent 401(k) services and allows you to really maximize your retirement earnings, but it does run into some issues with diversification.
There aren’t many services that they offer, however the ones that they do are top-notch. You never pay more than $250 annually for your service, which is fantastic, and it scales to your investment level.
Overall, Blooom is best for people who have IRA accounts with Fidelity and want their 401(k) managed on top of it. Otherwise, it can be limited.
7. Wealthsimple - Best for Canadians
Wealthsimple has a plethora of knowledge through its educational content, but it falls flat when you look at the actual robo-advisor part of the business model.
It’s fairly simple and does skin-deep investments, but their $0 minimum to open an account and ethical portfolio choices are fantastic.
Management isn’t free, but with the amount of information you can get from WealthSimple, it’s well worth the time spent in their service.
8. Stash - Best for New Investors
Stash is made for beginning investors who want to incorporate small scraps of spending to build up something bigger and bolder for their financial future.
Featuring a unique Stock Back card to help pair your debit card spending with stock-based rewards, Stash has a lot to offer and works well with any investment style.
While the monthly subscription fee is a bit odd considering this is an industry with plenty of services that require zero-cost-to-you management, it’s still worthwhile to be completely hands-free and know that your money is going to work for you.
9. Titan - Best Investment Experts
Titan is listed as the best for investment experts on our list because they help you invest in hedge funds, which can have startlingly large returns.
However, beyond that, they’re not a very good service. They basically only have their robo-advisor service, customer service is tough to reach, and their amount of educational content is staggeringly low.
It’s good to have access to robo-advisor services, but not so much when it’s at this high of a cost.
How to Choose the Best Robo-Advisor
We’ve labeled which robo-advisors are best for which type of investment portfolio and investment styles. This helps you pick the one that’s best for you so you can get started as soon as possible and begin investing.
Typically, you want to look at what types of stocks a specific robo-advisor service invests in, fees, and average return year-over-year so that you can know which one is best for your financial goals.
A lot of these products are similar with different emphases on stock portfolio types.
Robo-Advisor vs. Financial Advisor
Robo-advisors will always be cheaper, because once it’s built, maintenance isn’t a per-person or per-account cost. It’s a system cost for the entire financial institution.
That being said, a robo-advisor isn’t going to beat the market for you like a financial advisor can. A robo-advisor isn’t human and can’t respond to market trend changes as accurately, because a human is at least better at predicting a new stock trend than an AI.
An AI can only act on data.
Is a Robo-Advisor Right For You?
Robo-advisors are best for anyone who wants to begin investing, but doesn’t know much about it. You understand that investing in stocks can help your future and provide retirement funding, but you’re not sure how to get started.
This is the most typical customer who uses a robo-advisor. You can invest small amounts of money from your paycheck each week, or as you see fit, and the automated system will choose the best way to grow your portfolio based on your preferences.
If you’re someone who likes to be hands-on and sell stocks when they rise, a robo-advisor program is not for you.
Robo-Advisor FAQ's
A robo-advisor is an algorithm that buys and sells stocks based on your preferences. It automatically invests and sells stocks so that you can be completely hands-free while you’re making money.
This is meant to replace long-term portfolio managers and save you money on advisory fees.
Robo-advisors work by understanding your risk aversion, and how you want your portfolio managed. If you’re honest with your questionnaire, they will formulate an AI response based on your interests and investment habits.
This means that the robo-advisor mimics your behavior and makes the product more appealing to you, while also investing in a way that generates a positive response from the user.
It then auto invests money based on your preferences and by watching for specific trends in the market that you, based on your questionnaire entry, would be most likely to invest in.
No. Robo-advisors may beat the market on occasion for brief periods of time, however this is mostly up to random chance. Because the point of robo-advisors are meant to be appealing, they focus on solid returns instead of high returns.
For this reason, they mostly invest in broad index funds that can hold sustainable returns with as few low points as possible. Think about it: the entire process is automated for you and automated for the platform, so they’re making money by practically doing nothing once the AI engine is built and functioning.
They want to make sure these products remain appealing.
Robo-advisors can be accessed by certified employees working at the financial institution that you sign up with, so they can audit and monitor for fraudulent activity, or if they receive red flag warnings on an account (such as if there’s suspicious activity that they’ve detected).
However, this is up to how the company handles accounts. Otherwise, no: your account will not be used by anything other than an algorithm to make the investments for you.
Betterment
Betterment can help grow your money by making saving and investing easy. Invest in a tailored portfolio, set buckets for your goals, and earn rewards.
