Using a robo-advisor is an amazing opportunity for those who want to invest. It’s easy to learn and much cheaper than a real advisor. Best part of all? It does almost everything for you! Let’s take a look at the best robo-advisors of 2020…
Betterment is the oldest and most successful robo-advisor on the market and it’s still leading the pack. Accounts on Betterment usually have a .25% annual fee but the number can range anywhere between .25 and .40%, depending on how much you invest. Premium accounts also exist, for those that wish to invest over $100,000 and earn special bonuses. But don’t worry if you don’t have that much! Betterment is a perfect place for new investors as they don’t state a minimum balance for starters. So no matter what you have to invest, you’re good!
When it comes to Personal Capital, it’s a robo-advisor that comes with a lot of fine extras for its users. Most importantly, after signing up for that product, users will be working with a hybrid robo-human advisor. What does that mean? Newbies will be more comfortable talking to a real person from time to time and not just with an AI. One of the most used robo-advisors, Personal Capital has $7.5 billion in assets under management. While the price is a bit higher (portfolios with around $1 million have to pay .89% per year), this is a great option for a human- and robo-advisor in one.
Want to test out robo-advisors for the first time? Choose Wealthfront. One of the things that make it amazing is free management for the first $5,000 deposit. Completely free! Surely, mutual fund and ETF fees have to be paid but even the smallest portfolio will get free management at first. ETF fees are still the smallest on the market at only 0.08% APR, which helped Wealthfront get high marks on Modern Portfolio Theory.
Right now, SoFi is full of financial services like investments and loans but it bases its main strength on student loans and management. So, if you’re a student who’s interested in investing and loans, try using SoFi. Using only investment services, a $10,000 portfolio and less will have no fees at all while there are no fees for people with existing loans. Users with portfolios over $10,000 need to pay .25% regarding fees. The minimum deposit amount on SoFi is $100. In the end, small fees cover a human advisor and services to help new users set up an account and test it out and then to get a salary management coach! The company also creates interesting events for users all over the country.
Schwab Intelligent Portfolios
Charles Schwab is one of the biggest investment companies in the United States with a whopping $3.36 trillion in assets! The best thing they ever did for their investors was to make a robo-advisor under their name and manage $23 billion in robo-advising accounts. Yet, these numbers are not the only thing so outstanding in the company. Instead, it’s the fees. Or rather, their nonexistence. An account with a minimum of $5,000 deposit is free of any no advisory or management fees for the portfolio. Schwab Intelligent Portfolios fights for the best deals for its users and manages all the funds after you fill out a survey like with any other robo-advisors.
Robo-advisors can be an amazing tool for investors. Yet, don’t hesitate to contact a real financial or investment advisor when getting confused or losing funds.
Sources: The Balance