GOBankingRates

Best Robo-Advisors of 2019-2020

John Csiszar

Robo-advisors are computer-driven investment algorithms that are an inexpensive way to gain access to the markets. They’re also designed to make investing easy, so you can get started with a few clicks of a mouse — or a few swipes on your smartphone screen. Although robo-investing started with financial tech companies and smaller, independent firms, now it seems like every major firm offers its own robo-advisory platform.

In its second annual Best Brokers rankings, GOBankingRates identified the Best Robo-Advisors of 2019-2020.

Best Robo-Advisors of 2019-2020 Guide:

Best Robo-Advisors at a Glance

When deciding whether a particular robo-advisor is right for you, you’ll want to consider its advisory fee and account minimum. Here’s a quick look at how those factors compare for the Best Robo-Advisors:

Best Robo-Advisors of 2019-2020
Robo-Advisor Service (Advisory) Fee Account Minimum
Merrill Guided Investing 0.45% $5,000
Fidelity Go 0.35% $0
M1 Finance $0 $100
Ally Invest Cash-Enhanced Managed Portfolios $0 $100
Schwab Intelligent Portfolios $0 $5,000
SoFi Invest Automated Investing $0 $1
Ellevest 0.25% $0
SigFig 0%-0.25% $2,000
Wealthsimple 0.50% $0

Check Out: I Invested In a Robo-Advisor — and So Should You

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In-Depth Look at the Best Robo-Advisors

When considering using a robo-advisor to invest your money, look for solid investment choices, low fees and — if you have limited funds to invest — a low account minimum. Also consider promotional incentives that can stretch your investment dollars even further. Here’s a closer look at the Best Robo-Advisors of 2019-2020.

Merrill Guided Investing

Merrill Lynch’s affiliation with Bank of America makes Merrill Guided Investing a force to be reckoned with among robo-advisors.

Why It’s a Best Robo-Advisor: Although Merrill Guided Investing is one of the most expensive offerings on the Best Robo-Advisors list and has the highest account minimum, you’re getting an extensive package of investment support, advice and service with those higher minimums. In addition to offering 24/7 telephone support, Merrill Edge offers customer service via live chat and email. You can also make an appointment with a full-service financial advisor.

Pros:

Cons:

Promotions: Opening a Merrill Edge individual retirement account or Cash Management Account and funding it within 45 days from an account outside of Merrill and Bank of America might qualify you for a cash incentive when you maintain the balance for 45 days. Cash amounts range from $100-$600 when your assets reach $20,000-$200,000.

Costs and Fees: 0.45% advisory fee

Account Minimum: $5,000

To learn more about Merrill Guided Investing, visit its website.

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Fidelity Go

Fidelity is one of the preeminent names in the financial services industry, especially when it comes to mutual funds, so it makes sense that the firm runs its own robo-advisor division.

Why It’s a Best Robo-Advisor: Fidelity Go typically invests customer assets in its own Fidelity Flex funds, which, unlike at some other firms, have an expense ratio of zero. This means that you won’t pay any additional management fees or fund expenses on top of your advisory fee. Customers can benefit from the firm’s extensive library of articles and research about investing and markets, along with stock screeners and daily market data. And Fidelity excels at customer service, offering 24/7 phone access along with live chat and email.

Pros:

Cons:

Costs and Fees: 0.35% advisory fee

Account Minimum: None

To learn more about Fidelity Go, visit its website.

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M1 Finance

Rather than earning money on management fees, M1 Finance earns interest on cash balances in customer accounts and money it lends out, in addition to payments for order flow and cash and interchange fees on the debit card it offers to customers.

Why It’s a Best Robo-Advisor: M1 Finance is one of the few Best Robo-Advisors that do not have a management fee. Although it doesn’t offer 24/7 customer service, M1 features a slick interface and provides hundreds of educational articles on financial topics.

Pros:

Cons:

Promotions:

Costs and Fees: None

Account Minimum: $100

To learn more about M1 Finance, visit its website.

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Ally Invest Cash-Enhanced Managed Portfolios

Ally is a pioneering online bank that now offers automated investment management.

Why It’s a Best Robo-Advisor: Ally has low fees and a low account minimum, plus incentives to entice investors to sign up. And in addition to an informative investing blog, Ally Invest offers live chat as well as 24/7 customer service via phone.

Pros:

Cons:

Promotions: The firm currently offers cash bonuses and commission-free trading to new customers.

Costs and Fees: $0

Account Minimum: $100

To learn more about Ally Invest Cash-Enhanced Managed Portfolios, visit its website.

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Schwab Intelligent Portfolios

Schwab Intelligent Portfolios’ technology uses a short series of questions to choose which of its 53 exchange-traded funds are best for you.

Why It’s a Best Robo-Advisor: Charles Schwab is one of just a few Best Robo-Advisors that have no management fee. The firm makes money from its Schwab Intelligent Portfolios platform by allocating customer funds among Charles Schwab ETFs, which have their own management fees. Those fees are low and invisible, so for investors who can cough up the steep $5,000 minimum account balance, it’s refreshing to not have to pay an additional management fee. In addition, Charles Schwab offers live chat and a 24/7 customer service line, plus an investment blog.

Pros:

Cons:

Costs and Fees: None

Account Minimum: $5,000

To learn more about Schwab Intelligent Portfolios, visit its website.

Also See: New to Investing? Choose a Robo-Advisor

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SoFi Invest Automated Investing: Best for Low Fees and Minimums

SoFi Invest’s Automated Investing platform is an online-only entity that scores big points for charging no investment advisory fees and having just a $1 minimum balance requirement.

Why It’s a Best Robo-Advisor: The company has a sleek mobile app that makes managing your account easy. SoFi recently introduced its own proprietary line of exchange-traded funds, and it’s currently waiving the fees on those funds as well, resulting in a completely fee-free experience.

Pros:

Cons:

Promotions: For a limited time, SoFi is waiving first-year fees on SoFi Select 500 and SoFi Next 500 ETFs.

Costs and Fees: None

Account Minimum: $1

To learn more about SoFi Invest, visit its website.

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Ellevest

Ellevest is a unique robo-advisor in that it’s a company designed by women, for women. With no investment minimums and a low management fee, Ellevest cracks the ranks of the Best Robo-Advisors.

Why It’s a Best Robo-Advisor: The Ellevest investment algorithm takes into account factors such as the gender pay gap and the longer average lifespan for women when creating investment portfolios. The firm offers an online magazine and access to financial specialists for additional information.

Pros:

Cons:

Costs and Fees: 0.25% advisory fee

Account Minimum: None

To learn more about Ellevest, visit its website.

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SigFig

SigFig is unusual compared to other Best Robo-Advisors in that it has a tiered pricing model for its robo-advisory service. For your first $10,000, you’ll pay no management fee whatsoever. For amounts above $10,000, SigFig charges 0.25%.

Why It’s a Best Robo-Advisor: One of SigFig’s main strengths is its dashboard. It allows you to pull all of your financial information from varying accounts, such as 401(k) plans, other brokerage accounts and your robo-advisor account, into a single portfolio, which SigFig can then help you analyze for risk, diversification and other factors.

Pros:

Cons:

Costs and Fees: Up to 0.25% advisory fee

Account Minimum: $2,000

To learn more about SigFig, visit its website.

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Wealthsimple

Wealthsimple leverages the power of passive investing to help investors build wealth.

Why It’s a Best Robo-Advisor: Although Wealthsimple is one of the more expensive robo-advisors, it doesn’t have an account minimum. Investors have the option of choosing a socially responsible investment portfolio, which allocates funds into ETFs with themes such as clean energy, affordable housing, gender diversity and cleantech. Wealthsimple also offers a unique, proprietary Investing Master Class, which consists of 10 short, jargon-free videos designed to educate investors about savings and investment.

Pros:

Cons:

Promotions: Wealthsimple will waive your transfer fees when you transfer an account with more than $5,000 from another company.

Costs and Fees: 0.50% advisory fee

Account Minimum: None

To learn more about Wealthsimple, visit its website.

Read: How To Invest Your Money in 2019

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How We Picked the Best Robo-Advisors

GOBankingRates determined the Best Robo-Advisors by analyzing 18 of the largest and up-and-coming online brokers that offer robo-advisor accounts, using the following criteria:

Each broker was scored based on these individual categories, which were then summed up for a final score. Since robo-advisors manage your investments automatically, service fees and opening minimum investment scores were weighted double, while all others were weighted half.

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Tips for Choosing the Best Robo-Advisor

“Best Robo-Advisor” is a somewhat subjective title, but investors should look for a robo-advisor with a combination of low costs and high capabilities. Many robo-advisors have their own particular niches, so if you’re a socially responsible investor, for example, you’ll want to look for a robo-advisor that provides services tailored to your specific needs.

What To Watch Out For With Robo-Advisors

Robo-advisors have more limited investment options than traditional brokerage accounts, and they can therefore be less flexible. Avoid the temptation to set and forget a robo-advised account — you’ll want to keep an eye on your robo-advisor to ensure that it is meeting your financial goals. Also, be aware that whereas robo-advisors are an easy way for newer investors to access the market, most robo-advisors have not yet gone through a major market sell-off, so it’s impossible to know exactly how they’ll react.

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Robo-Advisor FAQs

A robo-advisor can be a great choice for investors who want a hands-off approach but don’t want to pay the brokerage fees associated with a traditional managed account. These frequently asked questions will give you the information you need before you open an account.

What Is a Robo-Advisor?

A robo-advisor is an automated investment platform run by computer algorithms based on investor input with little to no human intervention. Robo-advisors typically invest funds across a variety of ETFs according to investors’ risk tolerance and investment objectives.

What’s the Difference Between Robo-Advisors and Financial Advisors?

A robo-advisor uses a computer to allocate assets across various market sectors based on investor inputs. The nature of a computer-driven investment strategy is necessarily limited, lacking the human component that a professionally trained financial advisor can bring. But a robo-advisor is often a simpler, less expensive way to invest.

How Much Does a Robo-Advisor Cost?

Robo-advisors generally vary in cost from $0 to 0.50% of assets.

Can a Robo-Advisor Replace Traditional Advisors?

For clients looking for low-cost exposure to broad market sectors and those with a small amount of money to invest, robo-advisors can be a good start. Investors with more assets and advanced financial needs will likely still want to consult with a professional financial advisor, even if a portion of their portfolio is kept at a robo-advisor.

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More Best Brokers of 2019-2020

John Csiszar served in the financial services industry for 18 years, both as a registered investment advisor and as a certified financial planner. The former UCLA English major now writes extensively about the financial markets for numerous publications.

Andrew DePietro contributed to the reporting for this article. He is the lead researcher for GOBankingRates and a finance writer with years of experience covering investing, taxation, Social Security, entrepreneurship, real estate and housing markets.

Methodology: To determine the Best Brokers of 2019-2020, GOBankingRates analyzed 47 active U.S. brokerages and investment companies across eight categories: (1) Best Online Brokerages, (2) Best Online Stock Brokers for Beginners, (3) Best Robo-Advisors, (4) Best Investment Apps, (5) Best IRA Providers, (6) Best Roth IRA Providers, (7) Best Brokers for Day Traders, (8) Best 401(k) Companies.

Data for Best Brokers was compiled from and verified against the individual institutions’ websites between July 1, 2019, and Aug. 2, 2019. That data has been updated as of Oct. 1, 2019, but the rankings are based on the original data. Costs, terms and conditions are subject to change at the discretion of the individual financial institutions. Some information might reflect short-term or promotional offers only, and it is possible additional terms and conditions must be met in order to obtain any benefits mentioned. Availability might vary by region, minimum investment amounts and other factors. Please verify the terms and conditions before opening an account.

GOBankingRates is a personal finance website owned by ConsumerTrack Inc., an online marketing company serving top-tier banks, credit unions and other financial services organizations. Some brokerages mentioned in Best Brokers are clients of ConsumerTrack Inc., which serves more than 100 national, local and online financial institutions. Rankings are completely objective, and no institution, client or otherwise, paid for inclusion or specific placement. For more information, see the complete methodology for the rankings. 

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