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Before robo-advisors, investing money in the stock market was often reserved for those who could afford to hire a professional or had the time and expertise to do it themselves. You not only needed a large enough sum to invest but also the means to hire an expert who could guide you, should you lack investing experience.
Working with an advisor at J.P. Morgan, for example, generally means having at least $50,000 worth of investable assets, per its website. For wealth management service at Fidelity, the website states that you must have at least $250,000 invested in eligible Fidelity account(s) and a $50,000 account investment minimum. That's a lot of cash to have on hand when you're first starting out.
Thanks to the emergence of robo-advisors — essentially software that uses algorithms and data to invest on your behalf — you don't need much money, time or knowledge to get started. Robo-advisors offer a hands-off approach for all sorts of investors, whether you're just starting out or an experienced investor who wants to put your investments on autopilot.
To determine which robo-advisors are the best overall, CNBC Select analyzed over 20 different providers that offer automated investing services. In our research, we considered factors such as minimum deposit and balance requirements, associated fees, welcome bonuses, customer support and educational resources or tools available.
We also took into account financial companies that offer a variety of investment vehicles in addition to robo-advisors (like IRAs, brokerages and 529 plans), as well as diverse investment options, plus any outstanding features such as access to a human financial planner and tax-loss harvesting (when you only pay taxes on your net profit).
All of the robo-advisors on our list offer diversification, regularly rebalance your portfolio and help you plan out your investment goals so you can build wealth without spending a fortune. (See our methodology for more information on how we chose the best robo-advisors.)
Minimum deposit and balance
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. For example, Betterment doesn't require clients to maintain a minimum investment account balance, but there is a ACH deposit minimum of $10. Premium Investing requires a $100,000 minimum balance.
Fees may vary depending on the investment vehicle selected, account balances, etc. Click here for details.
Stocks, bonds, ETFs and cash
Betterment offers retirement and other education materials
See our methodology, terms apply. Does not apply to crypto asset portfolios.
Who's this for? Betterment was one of the first robo-advisors to hit the market in 2008, and it has maintained its good reputation ever since. There is no minimum balance required for Betterment Digital Investing, and the annual account fee is a low 0.25% of your fund balance.
Investors can get started by answering a few questions to assess their risk: how much they want to invest, why they're investing and their preferred timing for cashing out their investments.
Betterment will then recommend a stock-and-bond allocation based on your goals and adjust automatically whenever you make a deposit, withdraw funds or change your target allocation. Betterment's algorithms will also check your portfolio drifts (how far you are from your target allocation) once per day and rebalance if necessary. Investors can also adjust themselves or build a custom portfolio.
Accountholders can review the historical performance of their investment strategies, and there is a user-friendly financial dashboard where they can track their investments to make sure they're on track to meet their goals and also connect other external bank accounts so they can see all their money in one place.
There are a few automated tax tools accessible to all users, including tax-loss harvesting, where the robo-advisor will automatically sell holdings experiencing a loss to help offset taxes, as well as a "tax impact preview" tool that lets you see how much you might have to pay in taxes before withdrawing funds.
Minimum deposit and balance
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. $500 minimum deposit for investment accounts
Fees may vary depending on the investment vehicle selected. Zero account, transfer, trading or commission fees (fund ratios may apply). Wealthfront annual management advisory fee is 0.25% of your account balance
Get $50 bonus when you fund your first taxable investment account
Stocks, bonds, ETFs and cash. Additional asset classes to your portfolio include real estate, natural resources and dividend stocks
Offers free financial advice for college planning, retirement and homebuying
Who's this for? Like Betterment, Wealthfront was one of the first robo-advisors on the scene, and it shares many of the same features as its competitor, including features like a low 0.25% annual advisory fee and tax-loss harvesting that can help offset the advisory fee.
While Wealthfront is an overall good robo-advisor, we ranked it behind Betterment because there's a $500 minimum deposit for investment accounts. Wealthfront picks investments based on user's risk tolerance and timeline until retirement.
Wealthfront stands out for a few reasons: You can fund your first taxable Investment Account and get a $50 bonus. Unlike other robo-advisors on this list, Wealthfront also offers a 529 college savings plan and an 4.05% APY checking account with debit card access.
Minimum deposit and balance
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No account minimum for active investing through Schwab One® Brokerage Account. Automated investing through Schwab Intelligent Portfolios® requires a $5,000 minimum deposit
Fees may vary depending on the investment vehicle selected. Schwab One® Brokerage Account has no account fees, $0 commission fees for stock and ETF trades, $0 transaction fees for over 4,000 mutual funds and a $0.65 fee per options contract
Robo-advisor: Schwab Intelligent Portfolios® and Schwab Intelligent Portfolios Premium™ IRA: Charles Schwab Traditional, Roth, Rollover, Inherited and Custodial IRAs; plus, a Personal Choice Retirement Account® (PCRA) Brokerage and trading: Schwab One® Brokerage Account, Brokerage Account + Specialized Platforms and Support for Trading, Schwab Global Account™ and Schwab Organization Account
Stocks, bonds, mutual funds, CDs and ETFs
Extensive retirement planning tools
We ranked the automated investing service Schwab Intelligent Portfolios the best for making a large deposit because investors need to make a $5,000 minimum deposit in order to open an account. But they don't pay an advisory fee or commissions.
Once new investors answer a questionnaire about their investment goals, risk tolerance and timeline, Schwab creates a customized portfolio based on more than 80 variations of low-cost ETFs, investment strategies and risk profiles. The robo-advisor monitors the portfolios daily and automatically rebalances as needed.
For clients with invested assets of $50,000 or more, when an investment declines in value, Schwab's automatic tax-loss harvesting will help offset the taxes on investment gains.
Investors can upgrade to Schwab Intelligent Portfolios Premium for a one-time planning fee of $300, then a $30 per month advisory fee. For that price, accountholders get unlimited 1:1 guidance from a CFP, interactive planning tools, plus a personalized roadmap for reaching their goals.
Charles Schwab stands out from other names on this list because it has more than 300 brick-and-mortar branches across the U.S. for any in-person investing needs.
Minimum deposit and balance
No minimum deposit to start investing and no minimum account balance for Ellevest Membership advisory service; however, there are portfolio-specific minimums (ranging from $1 to approximately $240)
Fees may vary depending on the investment vehicle selected. Ellevest Essential membership costs $1/month (or $12/year), Ellevest Plus costs $5/month (or $54/year) and Ellevest Executive costs $9/month (or $97/year); fund fees range from 0.05% to 0.10% across all Ellevest Core Portfolios and 0.13% to 0.19% across all Ellevest Impact Portfolios
Stocks, bonds, ETFs, ESG, mutual, alternative and impact funds
Online workshops, email courses and video resources
Who's this for? Ellevest has quickly become a leader in the personal finance space for women thanks to its easy-to-use robo-advisor.
After asking a few questions about your money, life and career, Ellevest will create and manage a personalized investment portfolio for you. There's no minimum deposit to start investing, however, there are portfolio-specific minimums that range from $1 to about $240.
Ellevest made our list as the best robo-advisor for women because its platform algorithm considers important realities of women's lives, such as pay gaps, career breaks and longer life expectancy, so women can get a true sense of where they stand financially. Ellevest also provides access to online workshops, email courses and video resources from its team of financial planners and career coaches.
Unlike the others on this list, Ellevest requires membership in order to use its automated investing service. Here is a breakdown of pricing for the three tiers:
- Ellevest Essential membership: $1 per month, or $12 per year
- Ellevest Plus membership: $5 per month, or $54 per year (10% discount)
- Ellevest Executive membership: $9 per month, or $97 per year (10% discount)
Each membership tier includes the following:
- Automated investing with no minimum deposit
- Unlimited access to online workshops and educational resources from Ellevest financial planners and career coaches
- Access to Ellevest banking products to earn 5% cash back on select brands and round-up change to a savings account
- Discount on 1:1 sessions with Ellevest financial planners and career coaches where costs start at $38 (20% discount for Essential members, 30% for Plus members, 50% for Executive members)
- Personalized retirement plan (Plus and Executive members only)
- Access to goals-based investing where you can open up to five customized investment accounts for each of your goals like a down payment, kid's college and so on (Executive members only)
Minimum deposit and balance
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No account minimum for active or automated investing, or to participate in IPOs. $5 minimum to own a fractional share of a company. $10 minimum to trade crypto
Fees may vary depending on the investment vehicle selected. Active investing has zero commission fees for trading stocks and ETFs (exchange and fund management fees may apply). Automated investing has zero management fees
Download the SoFi app and get up to $1,000 when you open an Active SoFi Invest® Brokerage Account. Make your first crypto trade of $10 or more and earn $10 in bitcoin. SoFi covers up to $75 of any transfer fees your brokerage may charge when you transfer an account to SoFi
Stocks, bonds, ETFs, crypto, fractional shares and IPO participation
Investors can create a personal watchlist that follows their stocks to stay up to date and receive the latest investing news
Who's this for? SoFi, a fintech company that launched in 2011, consistently offers some of the most top-ranked financial products, and SoFi Invest® is no exception.
With SoFi Invest, the automated investing platform has zero account management fees and no minimum requirements. It offers a broad range of low-cost ETFs and will automatically rebalance your portfolio on a quarterly basis.
We ranked SoFi's robo-advisor option as the best for extra investing perks, because it's one of the few robo-advisors that offered bonuses. Here are a few:
- Download the SoFi app and get up to $1,000 when you open an Active SoFi Invest® Brokerage Account
- Make your first crypto trade of $10 or more and earn $10 in bitcoin
- SoFi covers up to $75 of any transfer fees your brokerage may charge when you transfer an account to SoFi
Plus, SoFi members receive a 0.125% interest rate discount on other SoFi lending products like student loan refinancing and personal loans. SoFi members can get access to exclusive events and experiences, as well as career services and financial advisors.
A robo-advisor is a software platform that uses algorithms to create an investment portfolio for you. The best robo-advisors aim to maximize your return potential according to your individual risk tolerance. Robo-advisors will automatically adjust your investments regularly, also known as rebalancing, so you don't have to.
When you open an account with a robo-advisor, you will start by answering some general questions such as your age, your investment goals, your investment time horizon and your overall risk tolerance, or how much risk you are willing to take.
You'll then deposit some money, and the robo-advisor will invest it in diversified portfolios of stocks and bonds that match your risk tolerance. For example, investors with aggressive risk tolerance may see a greater percentage of stock ETFs in their portfolio while those with more conservative risk tolerance are likely to see a greater percentage of bond ETFs in their portfolio.
To get the most out of your robo-advisor account, it's smart to contribute on a monthly basis (similar to your 401(k)), which will help your investment grow in the long term.
Robo-advisors make a great choice for beginners looking to dip their toe into the investing pool since they don't require you to know much about the stock market. Newbie investors should consider a robo-advisor that doesn't have a minimum opening deposit, such as Betterment or SoFi Invest, so you can start small to see if you like automated investing.
Experienced investors shouldn't discount robo-advisors, as they can be helpful to those who don't have the time to manage their portfolio and/or want a low-cost investing solution. With a robo-advisor, your investments are put on autopilot, working on your behalf, and you can check them whenever works for your schedule.
Research shows — and experts agree — it's good not to closely track your investments, which can lead to rash decision-making when the market goes up and down (which it always will). You're better off leaving your investments alone for the long haul and, if you need to, review them on a quarterly basis.
Robo-advisors are a popular choice because the management advisory fees are much more affordable than if you signed up with a traditional financial advisor. The advisory fee, which often range from 0.25% to 0.50%, is expressed as a percentage of your account balance on an annual basis. For example, a 0.25% management fee on a $10,000 annual balance would be $25.
In addition to paying the robo-advisor's management fee, if there is one, investors also pay fund fees called expense ratios. Expense ratios are fees charged by the companies offering the fund(s).
To determine which robo-advisors offer the best services for investors, CNBC Select reviewed 22 different platforms. We then narrowed down our top picks by considering the following factors:
- Account minimums
- Account, advisory, trading and fund fees
- Investment vehicles offered
- Selection of investments
- Educational tools and resources
- Customer support
- Sign-up bonuses
After reviewing the above features, we based our recommendations on platforms offering the lowest fees, the widest range of investment options, usability and any unique features like access to a human advisor. We also looked into each company's customer support structure and app reviews.
Your investment earnings through a robo-advisor are subject to fluctuations of the market. Your earnings also depends on any associated fees and the contributions you make to your account. There are no guarantees you'll earn a certain rate of return or current investment options will always be available. To determine the best approach for your specific investment goals, speaking with a reputable fiduciary investment advisor is recommended.