Best for Beginners
Best for Retirement Planning
Statistics predicted that within this year, robo advisors would manage assets worth $2.76 trillion—and it looks like they were right! Robotic advisors have been gaining more and more popularity as the years go by, and this year is no exception. With so many platforms on the market, choosing one can be a daunting task. That’s why we’ve compiled a list of the 10 best robo advisors in 2024.
10 Best Robo Advisors In India 2024
- Axos Invest: Best Overall
- Sofi: Best for Beginners
- Betterment: Best for Retirement Planning
- Ally Invest: Best for Low-Costs
- M1 Finance: Best for Automated Investing
- Acorns: Best for Small Accounts
- Stash: Best for Building a Portfolio
- Wealthfront: Best for Tax-Efficient Investing
- Fidelity Go: Best for Goal-Based Investing
- Vanguard: Best for Full-Service Investment Planning
What Is A Robo Advisor?
Did you know that cost is the leading reason Americans don’t have financial advisors? Robo advisors can be the perfect solution for those who want the convenience of having a financial advisor but don’t have the budget. Robotic advisors are automated investing platforms that use algorithms to create and manage your portfolio. They typically provide portfolio management, tax-loss harvesting, auto-rebalancing, and more without you needing to lift a finger – all for a fraction of the cost charged by traditional wealth managers.
Still With A Human Touch
While robotic advisors can provide automated portfolio management and other services, most still offer some form of human financial advisor involvement. For example, many platforms allow you to speak with a professional who can answer your questions or give advice on how best to manage your investments. Of course, the level of human interaction varies from one platform to another. For instance, some robo-advisor platforms may only have customer service reps available via email or phone while others will offer more in-depth conversations with wealth managers over video conferencing software.
How Do Robo Advisors Work?
Robo advisors work by taking your portfolio, taxable investment account (if applicable), and account minimum into consideration. Based on this information, a robo advisor will suggest an appropriate mix of investments that are tailored to your goals and risk tolerance. From there, they use sophisticated algorithms to implement a variety of strategies such as rebalancing or tax-loss harvesting in order to maximize returns. Most robotic advisors offer planning tools so you can easily track progress toward your goals and make adjustments if necessary.
Top 10 Best Robo Advisors In India 2024
Axos Invest is an online brokerage and investment platform ideal for long-term retirement strategies, offering low-cost index funds and diverse socially responsible portfolios. Customers enjoy unlimited access to advisory services, brokerage services, and human advisors for tailored financial advice.
Axos provides portfolio rebalancing with minimal maintenance required. However, drawbacks include limited international investments and a slightly higher per-trade cost of $1.50 on U.S.-based stocks and ETFs compared to competitors like Ally Invest Managed Portfolios or Robo Advisor accounts. The platform has restricted access to asset allocation or diversified portfolio options which could benefit those seeking a well-rounded financial strategy.
Sound advice is achievable with proper objectives, and Sofi delivers a platform for this purpose. They offer professional advisors and automated services for building diverse portfolios. Their advisory fee structure is relatively low, with expense ratios and management fees typically below industry standards. Portfolios are tailored to users’ specific needs and risk profiles.
However, those needing complex financial advice may find more value elsewhere. Investors certain of their investment objectives or seeking cost-sensitive markets should explore alternatives before committing to Sofi’s services. In summary, Sofi is a suitable choice for investors seeking low-cost sound investment advice. In summary, Sofi is a suitable choice for investors seeking low-cost sound investment advice.
Betterment is a top option on our best robo-advisor list offering automated, low-cost financial planning solutions. Investors can select from various core portfolios based on their strategy. With no account minimum and competitive advisory fees, Betterment provides basic portfolio analysis and asset allocation recommendations tailored to individual risk tolerance.
Customized advice includes educational materials and goal-oriented guidance for retirement or college savings plans. However, some may find the algorithm-based process impersonal compared to traditional wealth management solutions like Edge or Schwab Intelligent Portfolios that offer more personalized attention.
Ally Invest is an online broker-dealer offering various investments and services to help investors achieve their monetary goals. With a minimum investment of $100, it caters to those hesitant to commit large sums upfront. Ally boasts low trading fees, no inactivity fee or account minimum balance requirements, and 24/7 customer service for assistance with the platform or trades.
While lacking personalized portfolio management and tax features like Personal Capital, Ally provides research tools for informed decision-making on stocks or mutual funds. Additionally, they offer numerous mutual funds with low trading fees and no account minimum balance requirements for easy diversification without straining your finances.
M1 Finance is a good option for those who are looking to start investing small amounts of money. With no account minimums and no trading fees, it’s ideal for people who are just beginning to dip their toes into the world of investing. M1 Finance also offers a variety of automated portfolios that make diversifying your investments easier than ever. They charge no net advisory fee on accounts above $100k which can save you money in the long run if you become an active investor with large amounts of money. For those looking to access more sophisticated strategies or research tools, though, they may want to look elsewhere.
Personal loans are also not available through M1 Finance so you would need to find another platform if this type of financing is something you desire.
Similar to Sofi automated investing, Acorns is a robo advisor that caters to novice and beginner investors. It features low account minimums, no fees for accounts up to $5k, and an intuitive round-up feature that automatically invests your spare change from purchases made with connected debit and credit cards. It also offers automatic rebalancing as well as tax loss harvesting for tax optimization.
In terms of investing options, Acorns has three tiers of accounts – Acorns Core portfolios which only offer ETFs; Acorns Later Retirement Accounts for long-term retirement saving; and the more expensive ‘Acorns Grow’ portfolio which provides access to stocks, bonds, and other assets beyond ETFs.
The downside is that more advanced investors may find their options too limited. Additionally, fees can be quite high relative to other more established competitors in the industry.
As a federally registered investment advisor and SEC-registered broker-dealer, Stash provides access to a wide array of stocks and ETFs for investing. The platform offers low account minimums and no fees for management on accounts up to $5K. For manual accounts, there is a monthly fee ranging from $1 – $2.99 depending on the plan selected. The platform is also one of the most well-known certified financial planners, offering comprehensive planning advice tailored to individuals’ goals. Stash also offers a variety of learning resources such as videos and articles designed to help novice investors understand the basics of investing.
Investors on the platform can take advantage of fractional share investing, allowing them to invest in any company regardless of price per share. They can also access IRAs for tax-advantaged investments, but they do not currently offer direct rollovers from outside retirement plans like many other robo advisors do.
While Sofi automated investing offers fractional share investing and manual stock trading, Wealthfront focuses on the provision of comprehensive planning advice for individuals looking for a robo advisor with tailored investment strategies. For those whose taxable accounts are below $5,000, there is no management fee whatsoever. This makes it ideal for small to medium-sized investors starting out. Many accounts also offer tax-loss harvesting and direct indexing to maximize returns as well as goal-setting and tracking tools.
The downside is that management fees kick in at $5001+, which can reach up to .25% per year depending on the size of your balance (this fee drops to 0, however, if you have over $500 000). This makes Sofi automated investing unsuitable for more experienced investors who want the flexibility of manual stock trading or fractional share purchasing.
It’s important to take socially responsible investing into account when picking an auto investing provider, and Fidelity Go has you covered. They offer a diverse portfolio of stocks and ETFs to choose from, while their goal-setting and tracking tools are also very convenient for users. The account minimum they require is a bit higher at $10,000 compared to some other robotic advisors, but this fee is waived when it meets or surpasses the threshold. Management fees start from 0.35%, which may be considered high for more experienced investors. Unfortunately, there are no manual stock trading or fractional share investing options available either.
Meanwhile, you can use diversified portfolios and start investing without having to worry about market timing or managing your own investments. Fidelity Go offers comprehensive planning tools, too, meaning you’ll be able to make the most out of your money.
Vanguard Digital Advisor is a great choice for anyone looking to manage their investments with a hands-off approach. Their Personal Advisor Services offers comprehensive financial planning and portfolio management services, so you don’t have to worry about market timing or manually managing your own investments.
This service also comes with low fees of 0.15%, which are some of the lowest in the industry. You also have access to a wide selection of index funds and ETFs that can easily create an ideal portfolio for any investor’s needs, and even opt into responsible investing opportunities through Vanguard’s Environmental, Social and Governance (ESG) funds. The only downside is their higher account minimum requirement of $3,000, which may be difficult for some beginner investors to meet.
Advantages & Disadvantages Of Using Robo Advisors
Similar to any platform that helps investors and traders, robo-advisors have their fair share of pros and cons.
Robo advisors offer low-cost entry, making professional advice more accessible. They often have low or no minimum deposits, ideal for beginners. Additionally, they provide automated portfolio management and auto-rebalancing based on market conditions and goals.
Robo advisors may lack human decision-making compared to traditional wealth managers, possibly overlooking personal goals and risk capacity. Some platforms might limit investment options, restricting access to specific asset classes or strategies that could improve returns.
Robo Advisors Vs Human Financial Advisors
Robo advisors and human financial advisors both offer unique services to investors, each with their own advantages and disadvantages. So how do you know which option is right for you? Below we compare the two in terms of cost, service offerings, accessibility, and convenience.
Both robotic advisors and people advisors seek to help their clients achieve their financial goals. They both use market data and analysis to craft strategies tailored to individual needs.
The cost and service offerings are what really set the two apart. Robo advisors are typically more cost-effective than human financial advisors, and they can offer an automated portfolio management service at a fraction of the price. On the other hand, human advisors provide a wider scope of services such as tax optimization, insurance consulting, estate planning, and more.
How Much Do Robo-Advisors Cost?
Robotic advisors are typically much cheaper than their human counterparts. Most robotic advisors offer a low-cost, all-inclusive service, which often includes portfolio management and automated advice. This can range from 0.25% to 1% of the total assets managed or else set fees of around $1 – $10 per month depending on the services included in the package.
But here’s where it gets good: Some robotic advisors are offering their services for free. Many robo-advisors offer a free trial period so you can try out the platform before making any commitments.
How Can Robo Advisors Construct Your Investment Portfolio?
Top robo-advisors use algorithms to construct a portfolio that reflects your individual financial goals, risk tolerance, and other personal factors. From the information you provide them with, they will build a suitable portfolio of investments tailored specifically for you. What’s good about that? You don’t need to know anything about investing or the stock market. The robotic advisors do the hard work for you.
Different Types of Robo Advisors?
There are many types of robotic advisors available today, each with its own unique features and advantages. From traditional to fintech, here is a quick overview of the different types of robotic advisors and their respective features:
Traditional brokers offer a wide range of services, including financial advice and portfolio management. They will typically charge higher fees than robotic advisors but may provide more personalized service.
This type is the most “basic” form of robo advisor. They provide customers with basic advice and automated portfolio-building services through an algorithm-based approach. Pure robotic advisors typically offer lower fees than traditional brokers.
Fintech companies offer more advanced services, such as personalized portfolio advice and automated investing. These robotic advisors usually charge higher fees than pure robo-advisors but can provide customers with more specialized advice that is tailored to their individual goals.
How To Choose The Best Robo Advisor?
Want to know the best part? It can be easy for you to choose the best robo advisor on the market by using these criteria:
Low Costs & Fees
Understand the robo-advisory service charges by comparing annual fees and researching additional costs associated with specific services.
Minimum Deposit Requirements
Ensure you can meet the minimum deposit requirement before signing up with a robo advisor, as some require no balance while others need $1,000 or more upfront.
Choose a robo advisor that automatically rebalances your portfolio to maintain desired asset allocations for long-term investment goals.
Confirm whether the robo advisor offers tax-loss harvesting, which offsets taxes by selling stocks at a loss and reinvesting in similar stocks, saving money over time.
Human Financial Accessibility
Examine customer support options offered by the robo advisor and any fees related to speaking with financial professionals if needed.
Check available customer support options from the robo advisor and their response times to queries or questions for efficient assistance when required.
Read existing and past customer reviews of the considered robo advisors to gain informed opinions about their experiences.
Robo advisers offer a convenient and cost-effective way to invest. However, it’s important to do your due diligence before deciding which robo-adviser is best for you.
Research the offerings of different companies, compare fees and services available, read customer reviews, and make sure they have satisfactory customer service.
Once you’ve made an informed decision that meets your needs, then you can take advantage of the benefits that come with using a robo advisor.
Frequently Asked Questions (FAQs)
Most robo-advisors typically have an online sign-up process that requires you to provide basic financial and personal information, such as your name, address, income level, and risk tolerance.
Unfortunately, investing involves risk, and there is always the potential to lose money. However, most robo-advisors strive to minimize losses by diversifying investments and helping you set realistic goals that are in line with your risk tolerance.
That really depends on your individual situation. ETFs can be cheaper than robo-advisors, but they require more research and effort to manage the investments yourself. Also, with a robo-advisor you get access to personalized advice and portfolio management that you don’t necessarily get with an ETF.
Yes, Vanguard Marketing Corporation offers socially responsible investing through its portfolio of funds. You can use their Vanguard Digital Advisor to build a portfolio that takes your social values into account and invests in companies with high ESG (environmental, social, and governance) ratings. You can peruse the Vanguard Digital Advisor brochure for more information.
An advisory fee is the fee that a robo-advisor charges for managing your portfolio. This fee typically ranges from 0.25% to 0.50% of the assets in your account, depending on the firm and other factors such as your account size or type.
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