Investing

6 Best Robo-Advisors in October 2022

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If you’re ready to take advantage of the conveniences robo-advisors can bring to your financial goals, there’s only one step left to take:

Finding the best robo-advisor on the market.

Well, you’ve come to the right place because we’re here to help you find the right one. We looked under the hood of more than 14 different robo-advisors and rated each using our comprehensive star rating system. From management fees and account minimums to environmental, social and governance (ESG) and socially responsible investing (SRI) options, we focused on the details that matter most to your experience and bottom line.

Our overall pick for the best robo-advisor in October 2022 is SoFi Automated Investing.

Best robo-advisors in October 2022

SoFi Automated Investing

Visit SoFi

on SoFi Automated Investing’s secure website

Disclosures

Best for new investors

Rating: 4.8 out of 5
Minimum deposit: $1
Annual management fee: None

What we like most
SoFi’s trifecta helps you win in multiple ways: low minimum deposit, no annual management fees and free access to financial advisors.

Pros

  • No fees. No management or trading fees.
  • Human help. Unlimited, no-cost access to a financial advisor.
  • Banking access. Earn up to 2.00% APY with their checking/savings combo.

Cons

  • Limited investments. Primarily uses proprietary and Vanguard ETFs.
  • No SRI options. Ethically minded investors might be conflicted.
  • No tax-related extras. Tax-loss harvesting isn’t available.

Overview

For new investors, it’s hard to go wrong with SoFi Automated Investing and its $1 opening deposit, no annual management fees and free access to a financial advisor. You’ll complete a standard investor questionnaire, and the results will generate your ideal portfolio that is composed of exchange-traded funds (ETFs).

Funds will be a mix between SoFi-branded ETFs and those from low-cost market leaders like Vanguard and iShares. However, no matter the funds used in your portfolio, the SoFi platform automatically rebalances your holdings each quarter. Rebalancing keeps your portfolio aligned with your risk tolerance and time horizon, regardless of market conditions.

It’s worth noting that SoFi ETFs, which the platform could use for the bulk of your portfolio, have expense ratios that trend higher than average for similar funds. However, SoFi is waiving its management fees on all SoFi-branded ETFs in its robo-advisor portfolios through December 2022. This waiver could translate to substantial savings, especially if the fee waiver continues.

Finally, you might find that SoFi’s product suite hits a sweet pot — especially if you prefer to keep your finances streamlined. With products ranging from personal loans and mortgages to checking, savings and insurance products, you could easily consolidate investing, borrowing and banking under one roof.

Schwab Intelligent Portfolios

Visit Schwab

on Schwab Intelligent Portfolios ’s secure website

Best for larger investment portfolios

Rating: 4.7 out of 5
Minimum deposit: $5,000
Annual management fee: None

What we like most
Get unlimited access to a Certified Financial Planner (CFP) for only $30 per month with Premium subscription — a bargain if you keep a higher account balance.

Pros

  • Free version. No management fee for standard accounts.
  • Low expense ratios. Average ETF fees are 0.03% to 0.18%.
  • Wide range of account types. Includes trust and custodial investment accounts.

Cons

  • High minimum. You need at least $5,000 to get started.
  • No SRI options. If ESG/SRI options are a priority, you’ll want to keep looking.
  • Mandatory cash allocation. You’ll never be fully invested.

Overview

While likely not the ideal solution if you’re a new investor due to higher investment minimums ($5,000 for standard and $25,000 for premium accounts), established investors will find Schwab Intelligent Portfolios offers a diverse array of account types and low-cost ETFs.

You can use the free standard account as long as you like, which will get you access to 51 ETFs, three investment strategies and six risk profiles. If you want a more personalized experience, you can subscribe to Intelligent Portfolios Premium.

Premium requires a $25,000 account minimum and has a one-time $300 startup fee plus a $30 per month ($360 per year) subscription charge. For the extra cost, you’ll get unlimited one-on-one access to a CFP. However, you’ll need to weigh the costs of Premium, especially if you have a smaller account.

For example, a $360 charge for a financial advisor on a $25,000 account translates to a 1.44% annual management fee. Likewise, your $100,000 balance will mean that the $360 fee translates to a 0.36% annual assets under management (AUM) fee — a veritable steal compared to the average 0.59% to 1.18% annual AUM fee.

Finally, Schwab’s robo-advisor offers a wide range of account types, tax-loss harvesting (for accounts $50,000 and greater) and even has a savvy income-specific option for investors nearing retirement with Schwab Intelligent Income.

Betterment

Visit Betterment

on Betterment’s secure website

Best for goal-setting tools

Rating: 4.6 out of 5
Minimum deposit: $0
Annual management fee: 0.25%

What we like most
Betterment’s dynamic planning tools empower you in ways many robo-advisors don’t. You can monitor outside accounts, build goal-specific portfolios and easily track your goal progress.

Pros

  • No minimum. You can open a Betterment account for free.
  • Eight model portfolios. Betterment has more options than competitors.
  • Tax-loss harvesting. Portfolio maintenance includes tax-loss harvesting.

Cons

  • Management fees. Betterment charges 0.25% for digital investing.
  • Premium is costly. There’s a high minimum ($100,000) and fee (0.40%).
  • Limited customer support. Support options limited to phone (Monday to Friday) and email.

Overview

As a mainstay in the robo-advisor space since 2010, you’ll find that Betterment has some of the best goal-setting and planning tools on the market. With Betterment, you can divide portions of your funds into separate buckets for personalized goals, set up automatic contributions from external accounts and forecast how future changes might affect your long-term targets.

You can also meet with CFPs, though there’s a flat-rate fee for individual appointments (starting at $299) or the Premium Investing AUM fee model for unlimited appointments (0.40%). Premium has a $100,000 minimum. Goal-setting tools are helpful, but a human financial advisor can help you navigate complex circumstances better than algorithms.

You’ll have comprehensive investment options with Betterment, including ESG-focused portfolios, with eight models and robust automatic management. Robo-advisors are great for long-term, goal-oriented investing, and Betterment offers a quality, goal-focused service.

SigFig

Visit SigFig

on SigFig’s secure website

Best for smaller portfolios

Rating: 4.3 out of 5
Minimum deposit: $2,000
Annual management fee: Free for up to $10,000, 0.25% on balances above $10,000

What we like most
SigFig offers two unique benefits. First, there are no management fees on your first $10,000 invested. Next, if you’re a Fidelity, Schwab or TD Ameritrade customer, SigFig can manage your portfolio directly at those brokerages.

Pros

  • New investor incentives. Your first $10,000 invested is free.
  • Tax-related extras. Multiple tax-efficient strategies available.
  • Financial advisor access. Meet with advisors as often as you want.

Cons

  • Higher opening deposit. $2,000 minimum balance requirement.
  • No SRI options. ESG-focused investors may want to look elsewhere.
  • No banking products. Lacks cash accounts to streamline finances.

Overview

While you likely don’t know it, SigFig powers robo-advisors for some of the world’s leading financial institutions — Wells Fargo, Citizens Bank and Santander, to name a few. However, you can go straight to SigFig and score an incredible value as a direct client.

For example, your first $10,000 invested with SigFig is free. Then, as your wealth grows, you’ll only pay SigFig’s 0.25% management fees on your balance above $10,000. While there is a $2,000  minimum opening balance requirement, that could be easy to meet if you transfer an existing IRA or brokerage account.

SigFig also rewards you for growing your wealth. Once your account balance reaches $10,000, you’ll have no-cost access to a financial advisor — a true benefit for those investing for the long term.

As you compare the best robo-advisors, here’s one way SigFig truly stands out: account custody. If you use TD Ameritrade, Schwab or Fidelity as your current online broker, your accounts can stay put and SigFig can still manage your portfolio using its comprehensive service suite — including tax-loss harvesting, tax-optimized, automatic rebalancing and more.

Wealthfront

Visit Wealthfront

on Wealthfront’s secure website

Best for investment variety

Rating: 4.2 out of 5
Minimum deposit: $500
Annual management fee: 0.25%

What we like most
With 239 individual investment options in 17 different asset classes, Wealthfront gives you more control over your portfolio than most robo-advisors.

Pros

  • Investment variety. 239 investments in 17 asset classes.
  • Extensive SRI offerings. One pre-built portfolio and 18 SRI ETFs.
  • Line of credit. Potential to borrow money against the value of your portfolio.

Cons

  • No financial advisor access. You’ll have to get investment advice elsewhere.
  • No fractional shares. This could increase your cash allocation.
  • No chat support. Customer support is limited to email and weekday phone hours.

Overview

Wealthfront manages nearly $25 billion for its robo-advisor clients nationwide, making it one of the largest robo-advisors. Beyond the highly accessible $500 minimum investment, we particularly like that this robo-advisor offers a higher level of transparency on the historical performance of its three core portfolios (Classic, Socially Responsible and Direct Indexing) than most robos provide.

Wealthfront is the hands-down winner for investment options, with three core portfolios and 239 individual investments across 17 asset classes — including two cryptocurrency trusts. If you’re a hands-on investor who prefers to build your own portfolio, it’s impossible to beat Wealthfront’s portfolio customization options.

However, Wealthfront’s 0.25% management fee is among the highest on this list. Therefore, you’ll likely want to consider other factors that make Wealthfront an ideal fit for your investment goals, such as:

  • A cash management account. With a current yield of 2.00%, Wealthfront’s on par with other robos offering cash accounts like SoFi.
  • Portfolio lines of credit. If you have at least $25,000 invested in a taxable account,Wealthfront lets you take out a line of credit for up to 30% of your portfolio value.
  • Direct indexing. If you’re investing through a taxable account and meet the $100,000 investment minimum, this strategy that uses a combination of single stocks and ETFs to mimic a particular market index could offer substantial tax savings. They’re the only robo-advisor to offer direct indexing, too.

Vanguard

Visit Vanguard

on Vanguard’s secure website

Best for retirement investors

Rating: 4.1 out of 5
Minimum deposit: $3,000
Annual management fee: Up to 0.20%

What we like most
Retirement is the top investing goal for a majority of Americans, and Vanguard’s low-cost funds and robo-advisor fee structure can equal lower fees and more saved for your second act.

Pros

  • Emphasis on retirement. Invest with your long-term goals in mind.
  • No expense ratios. They’re part of a gross advisory fee.
  • Daily rebalancing. You won’t drift from your target asset allocation.

Cons

  • High minimum. You need at least $3,000 to get started.
  • No tax efficiency. Vanguard doesn’t harvest tax losses.
  • Few model portfolios. You don’t have many investment options.

Overview

In the brokerage world, Vanguard is a powerhouse known for low-fee index funds. Their Vanguard Digital Advisor robo-advisor platform holds true to their long history of low costs. While you’ll need a $3,000 minimum to get started with a Vanguard robo-advisor, your nest egg can grow with a fee structure designed to limit costs.

Unlike many other robo-advisors, Vanguard has a gross advisory fee of 0.20% AUM. Here’s what that means: You’ll be charged expense ratios for the Vanguard ETFs in your portfolio, but Vanguard will credit those fees toward your gross advisory fee. For example, if your cumulative portfolio expense ratio is 0.05%, your advisory fee will be 0.15%.

You can use Digital Advisor with various IRA types, as well as certain employer-sponsored 401(k) accounts. Vanguard’s robo-advisor rebalances portfolios daily but doesn’t have tax-loss harvesting. Vanguard doesn’t have as many investment options as some other robo-advisors, as it relies on its own proprietary index funds. Vanguard’s advanced retirement modeling is a nice feature as well.

If you want the added benefit of a human financial advisor, you’ll need to open an account for Vanguard Personal Advisor — a hybrid robo-advisor service with a $50,000 new account minimum and a maximum gross advisory fee of 0.30%.

Quick recap of our best robo-advisors in August 2022

Robo-advisorRatingMinimum opening depositAnnual management fee
SoFi Automated Investing 4.8 $1 None
Schwab Intelligent Portfolios 4.7$5,000None
Betterment 4.6$00.25% (0.40% for Premium)
SigFig 4.3$2,000Free for first $10,000, 0.25% on portion above $10,000 
Wealthfront 4.2$5000.25%
Vanguard 4.1$3,000Up to 0.20%

Frequently asked questions

Robo-advisor performance relative to the market depends on which stock indexes are used as a frame of reference and what kind of risk mitigation approach is chosen by the investor. Some of the biggest robo-advisors publish detailed information on historical portfolio returns that you can review.

Robo-advisors are a cost-effective approach to investing. They’re less expensive than most financial professionals and can help guide those who are new to the world of investing or have straightforward financial goals.

It depends. The ability of a robo-advisor to deliver returns depends on the underlying assets in your portfolio and returns will vary depending on your unique risk tolerance, time horizon and market conditions. However, robo-advisors can help you stick to an investment strategy for the long term and avoid making costly emotional investing decisions.

How we chose the best robo-advisors

To build our list of the best robo-advisors, we evaluated 13 providers using a 5-star rating system.

To decide a firm’s overall star rating, we focused on 13 criteria in six categories that would most impact your costs and experience as a customer:

  • Fees and costs: 30%
    You deserve to know what you’ll pay as a client at each robo-advisor. We logged every fee you could possibly be charged and awarded our highest ratings to providers with the lowest comprehensive fees.
  • Portfolio construction: 20%
    You deserve to know the assets and investment strategies available. The wider the investment options, the higher our score.
  • Account types: 15%
    Having multiple accounts with a single provider can help streamline your financial life. Our highest ratings go to providers who offer multiple account types.
  • Investor support: 15%
    Extra features like financial planning assistance, tax-loss harvesting and automatic rebalancing can make the difference for some investors. The greater the investor support options, the higher our rating.
  • Account minimums: 10%
    MagnifyMoney believes in democratizing finance. We only considered robo-advisors with investment minimums of $10,000 or less, with our highest ratings given to companies with low to no minimums.
  • Customer service: 10%
    You deserve to be taken care of every step of the way. Our highest ratings go to providers with the greatest number of customer support options, including email, chat and phone.

The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.