Here Are The Top Robo Advisors You Never Heard Of



·         A robo-advisor assists users in managing their portfolio without the aid of a human financial planner.

·         WiseBanyan does not charge anything for portfolio management and it also has no minimum account balance requirement.

·         Charles Schwab Intelligent Portfolios does not have account service fees, advisory fees, or commissions but there are investment expense ratios.

·         Betterment charges 0.35 percent for accounts with less than $10,000 balance but only 0.15 percent if the balance is more than $100,000. Get 6 Months Free With Betterment On Us With This Coupon Code.

·         Wealthfront does not charge management fees for accounts less than $15,000 balance, but they do charge 0.25 percent if the balance is more than that amount.

·         Blooom focuses on employer-sponsored plans like 401(k)s and they offer free analysis before customers sign up with them.

·         FutureAdvisor is a good option for those who have accounts with TD Ameritrade or Fidelity.

In this age of computer technology and connectivity, it is unsurprising that people are relying more and more on the internet for information and services.

There are online stores, online schools, and online banking.  Workers telecommute, people use online apps to communicate, they read news from digital publications, and they download games, music, and movies from the Web.

Similarly, a good number of investors use the internet to manage their portfolio, and one of the online services that many find convenient, easy, and inexpensive is what is known as robo-advisors (or robo-advisers).

What are Robo-Advisors?

A robo-advisor is an automated online investment service that assists users in managing their portfolio without the aid of a human financial planner.

Through the service, you can invest in different products, have your portfolio rebalanced regularly, harvest tax losses, and reinvest dividends.

Because it typically costs less and requires low minimum balance, many young investors who are comfortable using computers and the internet find it suitable for their needs.  And because of lower fees, investors often reap higher yields.

Top Robo-Advisors to Choose From

There are now many robo-advisors that you can choose from.  In the United States, for example, there are companies like Wealthfront, Betterment, Future Advisor, and many others.

Like all other companies, they have their own strengths, so it would be good to take a look if what they are offering meets your needs.

·         Robo-Advisors Without Management Fees

If you are looking for a robo-advisor that does not charge anything for portfolio management, then you can consider these two top companies.

WiseBanyan.  This robo-investor charges nothing for portfolio management and it also has no minimum account balance requirement.  It is best suited for beginner investors, those with IRA accounts, and those who are looking for a way to invest without dishing out a lot of money.

It supports Roth, traditional, and SEP IRAs as well as individual non-retirement accounts.  Their exchange-traded funds are from nine asset classes.

There is no management fee and automatic portfolio balancing is also free, but the company does charge for add-ons such as tax-loss harvesting, transfers of IRA, and transfer for non-retirement account to a different broker.

The company calls these “a la carte products and services,” which customers can avail to personalize their accounts. These are optional features, which the investor can choose to pay for or not.

Charles Schwab Intelligent Portfolios.  This is a good option for beginner investors and IRA investors.  The company has up to 53 exchange-traded funds that covers up to 20 asset classes, and they support traditional Roth and rollover IRAs, custodial accounts and trusts, and individual and joint non-retirement account.

They do not charge for account service fees, advisory fees, or commissions.

But while there is no management fee, there are investment expense ratios, the average of which are: 0.08 percent for conservative portfolios; 0.19 percent for moderate portfolios; and 0.24 percent for aggressive portfolios.

This means that you should still expect to have expenses except that they are not called fees.  Still, you may find that these cost less than the management fees that some other robo-advisors charge.

There are many features included in the Charles Schwab robo-advisor, like customization, goal tracking, automatic rebalancing, and  24/7 live chat and phone support. The minimum amount required for an account is $5,000.

·         Robo-Advisors With Low Management Fees and Offer More

One of the most important thing in choosing a robo-advisor is the value for your money – that is, what perks or features you get in return for what you are paying for.

These two robo-advisors are considered to be among the best, according to the list provided by Nerd Wallet, because of what they offer.

Betterment – Get 6 Months Free on Us.  This robo-advisor has no minimum balance requirement and there are no trade fees, transaction fees, and rebalancing fees.

They do charge customers for management fees, and the pricing system for this is categorized into three tiers: the first one, for average account balances lower than $10,000, they charge 0.35 percent; the second, for balances between $10,000 and $100,000, they charge 0.25 percent; and the third one, for balances of more than $100,000, they charge 0.15 percent.

The company allows investors to allocate how much they want to invest on stock ETFs and how much in bond ETFs, although it does support REITs and Commodity ETFs.  They also use a goal-based investing framework, which lets customers know if they are moving toward their investment goals.

According to Forbes, Betterment’s website is one of its most notable features and you can use different devices to visit your account online.

Wealthfront.  This company charges no management fee for accounts with balances less than $15,000, but they do charge 0.25 percent if the balance is more than that amount.  They also charge ETF fees, and you need at least $500 to open a Wealthfront account.

According the website, the company has different types of account, namely individual, joint, traditional IRA, 401(k) rollovers, and SEP IRAs.

Moreover, the company offers direct indexing in which they purchase individual securities on behalf of their customers to optimize tax-loss harvesting.

·         Robo-Advisors for Employer-Sponsored Retirement Plans

Individuals who want to make handling their retirement plans simpler and easier can opt for a robo-advisor that focuses on managing these.

Blooom.  This robo-advisor focuses on employer-sponsored plans like 401(k)s.  They offer free analysis, so you can check their services before deciding to sign up with them.

If you do decide to sign up, you’d have to pay a flat monthly rate based on your account balance.

If you have $20,000 in your account, you will be charged $4 per month; it it’s between $20,000 and $500,000, you will have to pay $15 per month; and if you account is worth more than $500,000, you will have to dish out $79 per month.  The robo-advisor will rebalance your account every 90 days.

FutureAdvisor.   This option is best for those who have accounts with TD Ameritrade or Fidelity. The platform supports Roth, rollover, traditional, and SEP RIAs, individual and joint non-retirement accounts, and 401(k) accounts with Fidelity.

You would need a minimum account balance of $10,000 with Future Advisor and you have to pay 0.50 percent management fee.

While users can access many services at no additional cost such as direct management of Fidelity 401(k) and portfolio analysis, the company also offers paid features like tax-loss harvesting, taxable accounts management, and so on.

There are many other robo-advisors that you can consider such as Vanguard, which requires a minimum account balance of $50,000 and charges 0.30 percent management fee, and Personal Capital requires a minimum of $25,000 and charges between 0.49 percent to 0.89 percent.

Both give you access to a human financial adviser.  There is also Motif Investing, which groups together stocks into “themes” such as green investing, IPOs, biotechnology, etc.  It requires no minimum to start investing.

Choosing the Right Robo-Adviser

Remember that robo-advisors are automated, so you need to be comfortable with the idea that your portfolio is manage automatically.

When choosing which to sign up with, check the minimum investment required, fees that you have pay, the type of investor you are (hands on or hands off, active or passive, aggressive or conservative), and the features it offers as well as how it fits your needs.

Most of them lets you customize your account and some of them have apps.

Make sure to take your time and learn more about each company before making a decision.

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Written by ratetake


Martin is Head of Real Estate and Finance division at RateTake. He creates content that helps people understand and make the right decisions for their financial future.