Robo-advisers have become popular in recent years, and industry experts expect them to become even more popular in the years ahead. That’s because robo-advisers offer low-cost financial advice that meets the needs of many investors, and they even add some extras that are tough for human advisers to match. No wonder robo-advisers have acquired hundreds of billions of dollars in assets under management so quickly.
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Here are the best robo-advisers to manage your money and how much they cost.
What is a robo-adviser?
The term robo-adviser sounds really high-tech, but it’s actually much simpler than you might think. A robo-adviser is a financial adviser that uses an investment program, an algorithm, to automatically select investments for you.
The investment choices are based on things such as:
- How much risk you’re willing to bear
- What level of returns you want
- When you need the money
Based on these factors and others, the robo-adviser selects a portfolio of exchange-traded funds (ETFs) using sound investment management. For example, the robo-adviser creates a diversified portfolio of ETFs, rather than just investing it all in one fund. Extensive research has shown that diversification reduces your risk and can actually increase your returns.
It’s simple to get started with a robo-adviser, and you can quickly set up an account online. And because it’s online and automated, robo-advisers are much cheaper than traditional in-person financial advice. Plus, you usually get some other cool benefits thrown in, too. Features such as portfolio rebalancing and tax-loss harvesting are typically offered, both of which should improve your returns over time.
Here are the best robo-advisers in January:
- Betterment
- Wealthfront
- Ellevest
- SoFi Invest
- Charles Schwab Intelligent Portfolios
- Vanguard Personal Advisor Services
What does a robo-adviser cost?
While the costs vary from service-to-service, typically the cost of a robo-adviser has two major components:
- Management fee: This fee typically costs 0.25 percent to 0.5 percent of your assets on an annual basis, though fees may be lower or higher. So every $10,000 invested would incur management fees of $25 to $50.
- Funds’ expense ratios: The robo-adviser will invest your money in various funds that also charge fees based on your assets. The fees can vary widely, but range from 0.05 percent to 0.65 percent, costing $5 to $65 annually for every $10,000 invested, though some funds may cost more. These fees will be deducted proportionally on a daily basis by the fund company, and they will be almost invisible to you.
While sometimes the robo-adviser charges a few incidental fees when you require something special, in general you won’t run up any extra charges. So it doesn’t cost you anything extra to buy and sell funds, move money out of your account or change your allocation if your risk tolerance or a financial goal changes.

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Since you’re investing, your returns aren’t guaranteed by the Federal Deposit Insurance Corporation (FDIC), so you can lose money. However, money that your robo-adviser puts in a cash account is typically protected by the FDIC.
Overview: Top robo-advisers in January 2021
Betterment
As one of the top players in the industry, Betterment sets the standard for service. It offers automatic rebalancing, tax-loss harvesting, a personalized retirement plan as well as the opportunity to buy fractional shares in funds so that all your money is invested rather than having to wait until you have enough funds to buy a full share. You can sync outside accounts, too, and receive advice on them, while customer support is available seven days a week. Betterment’s premium plan ups the game with access to a human adviser.
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Management fee: 0.25 percent – 0.4 percent, depending on service level
Account minimum: $0
Wealthfront
One of the largest robo-advisers, Wealthfront offers goal-based investing that helps you understand how your financial choices today affect your future. Wealthfront also provides tax-loss harvesting, and the fees on its ETFs are among the lowest in the industry. Plus, the firm provides interest on its FDIC-insured cash management account, and doesn’t charge management fees for it, either. Also potentially useful, you can borrow against the value of your account at especially attractive interest rates.
Management fee: 0.25 percent
Account minimum: $500
Ellevest
While Ellevest focuses on women specifically, its financial planning incorporates the needs of everyone. Ellevest is great for goal-based investing, even if you have multiple goals. Unlike other robo-advisers, Ellevest charges a monthly fee ranging from $1 to $9, depending on what you need. The basic tier gets you an investment portfolio, access to education and some banking features (ATM reimbursements, for example). Higher tiers offer goal-based planning and reduced fees on meetings with financial planners and executive coaches.
Management fee: $1 – $9 per month, depending on service level
Account minimum: $0
SoFi Invest
SoFi has expanded into the realm of robo-advisers with an incredibly investor-friendly service. The company provides automatic rebalancing and goal-based planning to help you reach your life objectives. Plus, you’ll get career services, access to financial advisers and discounts on other SoFi products for no extra cost. If you already have a relationship with SoFi, then it could make even more sense to take it to the next level with their robo-adviser.
Management fee: none
Account minimum: $1
Charles Schwab Intelligent Portfolios
With Intelligent Portfolios, Charles Schwab is going after the robo-adviser market hard. Well-known for its investor-friendly practices, Schwab brings this same spirit to robos, with no-cost features such as rebalancing, automatic tax-loss harvesting and 24/7 access to U.S.-based customer service. And Schwab charges no management fee, so it’s worth saving up to meet the higher account minimum.
Management fee: none
Account minimum: $5,000
Vanguard Personal Advisor Services
You’ll have to bring some real assets to Vanguard to get started with its Personal Advisor Services (though you can opt for Vanguard’s Digital Advisor with just a $3,000 minimum), but the low-cost leader does a lot for its 0.3 percent fee. Here you’ll work with human advisers who will craft your portfolio based on your goals – and they don’t work on commission, so there’s no financial incentive for them to push certain products. And the more you have with Vanguard, the lower your fee, though it takes some serious funds before those fees start declining.
Management fee: 0.3 percent on assets less than $5 million scaling to 0.05 percent on assets more than $25 million
Account minimum: $50,000
Bottom line
The biggest advantage of opening a robo-adviser account is having an experienced company manage your money at a reasonable fee. But once you’ve opened the account, you’re just getting started. You’ll want to continue investing money over time to increase your savings. Now more than ever, it’s easy to open an account and get started on the path to financial security.
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Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.