Best Robo-Advisors for 2020

Robo-advisors have revolutionized the way many people invest. They vastly simplify investing for those of us who live busy lives.

Because who has time to spend hours managing a stock portfolio?

But there is an increasing number of robo-advisors available these days. As such, we’ll take a look at the best robo-advisors in this post.

After all, one of the main reasons to use a robo-advisor is to save time. So you probably don’t want to spend untold amounts of time researching which ones are best.

So, let’s get to it and take a look at the best robo-advisors for 2020.

Best Robo-Advisors for 2020: Overview

Robo-Advisor

Best For

Betterment’s standout features are its automatic tax-loss harvesting (TLH+) and dynamic rebalancing. It also invests your money in 13 different asset classes, ensuring broad market exposure.

It does all this with a management fee of 0.25% (Digital) or 0.40% (Premium). The Premium plan has a $100,000 minimum, so most investors will start with Digital.

  • Fees: 0.25% (Betterment Digital); 0.40% (Betterment Premium).
  • Account Minimum: $0.
  • Best for: Investors who want a hands-off investing experience.

Open an account | Read our review

M1 Finance

M1 Finance combines elements of a robo-advisor with DIY investing tools to give you a custom investing experience that you can fully automate. That makes it great for experienced investors.

M1 Finance review

M1’s standout feature is its pie-based investing. This feature allows you to assign percentages to each one of your investments. Then, each time you deposit, the system distributes your money according to each investment’s target allocation.

It also has fractional shares, which helps it meet your targets.

It doesn’t have tax-loss harvesting, but it does allow you to rebalance your portfolio with one click. Plus, a basic account has no membership fees, giving you the option to use the app for free.

  • Fees: $0 or $125/year (M1 Plus).
  • Account Minimum: $100 initial deposit; $0 after that.
  • Best for: Investors who want a portfolio they can easily customize but also fully automate.

Open an account | Read our review

Blooom

Blooom is a different kind of robo-advisor. In fact, it’s the only robo-advisor currently able to manage 401(k) accounts, IRAs, and other retirement accounts.

In particular, it works with Fidelity, Schwab, and Vanguard accounts.

Blooom Logo

Blooom has three subscription tiers: Essentials ($45/year), Standard ($120/year), and Unlimited ($250/year). A tiered approach means each tier adds on additional features.

As a robo-advisor, Blooom will analyze your retirement portfolio and then invest it in low-cost ETFs. Its other paid features include advisor access and auto-optimization.

  • Fees: $45, $120, or $250/year.
  • Account Minimum: $0.
  • Best for: Investors who want help managing their retirement accounts.

Open an account | Read our review

SoFi Automated Investing

SoFi Automated Investing makes a compelling case for the best robo-advisor in an increasingly competitive field. It has no management fees (that’s 0.00%) offers access to financial advisors by phone.

SoFi also has its own ETFs, and some of them have a 0.00% expense ratio. Plus, it has specialized ETFs, such as one that invests in gig economy companies like Uber.

SoFi Automated Investing doesn’t currently offer tax-loss harvesting, and you only have five risk levels to choose from. Still, with its ultra-low fees, it will likely appeal to many investors.

  • Fees: No management or membership fees.
  • Account Minimum: $1.
  • Best for: Cost-conscious investors who don’t need extra bells and whistles.

Acorns

Acorns has the unique distinction of helping people invest their spare change. It automatically rounds up to the nearest dollar and then invests the difference. Once you have at least $5, it will invest your money in low-cost ETFs.

This is great for those who need a little nudge in order to start saving. Acorns has a $1/month fee for its Invest product.

That’s actually more than Betterment’s 0.25% fee for smaller balances, though it’s obviously still quite affordable. Like SoFi, Acorns has five risk levels to choose from.

You can also set up recurring investments of a set amount of money rather than only investing your spare change.

  • Fees: $1, $3, or $5/month.
  • Account Minimum: $0 to get started; $5 minimum to invest your money.
  • Best for: Everyday day savers who need a little extra help getting started.

Vanguard Digital Advisor

Long the gold standard for DIY investing, Vanguard has since joined the robo-advisor party. Now, with its Digital Advisor, it offers investment management with just a 0.15% management fee.

Vanguard Digital Advisor does have a minimum investment of $3,000, but that matches the minimum for VTSAX. In other words, existing Vanguard investors are used to minimum investments, so they probably won’t mind.

Digital Advisor doesn’t currently have the advanced features of some other robo-advisors, but it has a mailing list specifically to inform you of new features.

  • Fees: 0.15% management fee.
  • Account Minimum: $3,000.
  • Best for: Existing Vanguard investors seeking a low-cost robo-advisor.

Wealthfront

Wealthfront is quite comparable to Betterment; its robo-advisor has a 0.25% management fee as well. It also has a diverse set of ETFs, although its funds have a slightly lower expense ratio on average.

Wealthfront Logo

Specifically, the average is about 0.11% for Betterment compared to 0.09% for Wealthfront. Not a noticeable difference by any means. Also, like Betterment, Wealthfront has a cash account with a similar APY. It also has many risk levels to choose from, and tax-loss harvesting.

Unlike Betterment, Wealthfront does have a $500 minimum investment.

  • Fees: 0.25% management fee.
  • Account Minimum: $500.
  • Best for: Cost-conscious investors who want a hands-off investing experience.

Charles Schwab Intelligent Portfolios

Charles Schwab Intelligent Portfolios has no management fee, but that comes with a caveat: it holds a significant chunk of your portfolio in cash.

Charles Schwab Logo

Specifically, that could range anyway from 6% to close to 30% of your balance. The cash balance does earn interest, but it’s in line with other savings accounts.

That said, expense ratios are low, and Schwab gives you a diverse set of ETFs. It does however have a $5,000 minimum, and no tax-loss harvesting below $50,000 invested.

  • Fees: No management or membership fees (requires cash balance).
  • Account Minimum: $5,000.
  • Best for: Risk-averse investors who don’t mind having a large cash balance.

SigFig

SigFig has no management fees for the first $10,000 invested. Of course, some robo-advisors on this list, such as SoFi, have no management fees at all.

SigFig Logo

Still, if you like the other things SigFig has to offer, it could be an attractive proposition. And some analyses show that SigFig has great performance in terms of ROI.

Beyond $10,000 invested, this robo-advisor has a 0.25% management fee, like others on this list. Also notable is that it actually manages investments with TD Ameritrade rather than holding investments itself.

SigFig has a $2,000 minimum investment.

  • Fees: No management fees for the first $10,000; 0.25% after that.
  • Account Minimum: $2,000.
  • Best for: Cost-conscious investors who want the best investment performance.

Axos Invest

Formerly known as WiseBanyan, Axos Invest charges a 0.24% fee for features like tax-loss harvesting and selective trading.

Axos Invest Logo

Previously, the account minimum was only $1. It is $500 now, but it includes all of the featured that were relegated to Premium before.

Selective trading is a nice feature: this gives you some customizability if there are certain investments you want to avoid.

  • Fees: 0.24.%.
  • Account Minimum: $500.
  • Best for: Investors who want a hands-off experience but also want the option to customize their portfolio.

Best Robo-Advisors: Comparison

Robo-Advisor

Best For

Min. Investment

Fees

Benefits

Hands-off investing

$0

0.25% or 0.40%

Tax-loss harvesting, dynamic rbalancing

Customizable portfolios

$100

$0 or $125/yr.

Pie-based investing

Retirement accounts

$0

$45, $120, or $250/yr.

No minimums and advisor access

Low-cost investing

$1

0.00%

No expense ratios

Everyday saving

$5

$1, $3, or $5/mo.

Invest your change

Low-cost investing

$3,000

0.15%

Low management fees

Financial planning

$500

0.25%

Low management fees

Risk-averse investors

$5,000

0.00%

No management fees

High-ROI investing

$2,000

0.00% first $10,000, then 0.25%

Strong portfolio performance

Pay by the feature

$1

0.00%; 0.24% for TLH, $2/mo. for auto-invest, $3/mo. for more investment options

Selective portfolios: remove ETFs you don’t want

What is a Robo-Advisor?

A robo-advisor is an algorithm-driven set of investment tools that allow investors to partially or entirely automate their investment portfolio.

Every robo-advisor is different. Many have no minimum investment, while some, like Vanguard Personal Advisor Services, have a $100,000 minimum.

Fees vary, too, as do the features each robo-advisor has.

However, in general, the biggest advantage of using a robo-advisor is that they give you more guidance than you would have on your own. And, more importantly, they do so while charging less than a human advisor.

Notably, some robo-advisors give you the option to work with human advisors. SoFi Automated Investing offers help for no additional charge. Betterment offers it, too, charging $199-$299 by the session.

All robo-advisors have their own unique advantages and disadvantages – hence the need for this list.

Which Robo-Advisor is Best?

There isn’t a single “best” robo-advisor. The one you should choose depends on what you hope to get out of it.

For example, if tax-loss harvesting is a must for you Betterment is our top pick. If you want to be in complete control over your portfolio, M1 Finance is a great choice.

Of course, there are other considerations, such as fees and minimum balances. Betterment and SoFi give you the option to work with human financial advisors if that gives you peace of mind.

In the end, it comes down to which features are most important to you and what you hope to accomplish.

Robo-Advisor Pros & Cons

Again, every robo-advisor is different, which means not all of these pros and cons will apply to every robo-advisor. See above to check whether these apply to the one you’re considering.

However, in general, here are the pros and cons for most robo-advisors:

Pros

  • Easier to use and less research required compared to DIY investing/human advisors
  • Cheaper than human financial advisors
  • Low account minimums

Cons

  • Less investment flexibility than DIY investing/human advisors
  • Most come with a management or membership fee
  • Most don’t offer advice from a human financial advisor

Ready to Get Started? Our Top Picks:

Monthly Fees

$0

Minimum Investment

$0

Promo
Tax-Loss Harvesting

No

Dynamic Rebalancing

Yes

Monthly Fees

$0

Minimum Investment

$0

Promo
Tax-Loss Harvesting

Yes

Dynamic Rebalancing

Yes

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