Best Robo-Advisors

Robo advisors have become increasingly popular in recent years as a convenient and cost-effective way to invest money. These automated investment platforms use algorithms to create and manage a diversified portfolio of stocks, bonds and other assets based on an investor's financial goals, risk tolerance and time horizon.

Today, there are more options than ever when it comes to automating your investments. Whether you're a seasoned investor or just starting out, choosing the right robo-advisor is essential. Check out Benzinga's top picks for the best robo advisors this year and learn a bit more about the pros and cons that come with using their innovative tools.

Quick Look: The Best Robo-Advisors

• Best for High Net Worth Individuals: Empower
• Best for New Investors: Playbook
• Best for Customizable Auto Investing: M1 Finance
• Best for New Investors With Limited Time: Titan
• Best for Cost-Conscious Investors: SoFi Automated Investing
• Best for Auto Trading: Streetbeat
• Best for AI Investing: Magnifi
• Best for Long Term Investors: Wealthfront

Best Robo-Advisors for Investing

Wondering which robo-advisor is right for you? Take a look at the industry's best robo advisors to find the perfect investment solutions for your financial goals.

1. Best for High Net Worth Individuals: Empower

If you have a complicated financial situation, you might consider investing using robo-advisors with Empower, formerly Personal Capital. Empower is a hybrid financial planner, wealth management company and investment service that can help you manage your money for the future and plan toward multiple goals.

The biggest draw of Empower’s system is its human advisor services. No matter your balance, you’ll receive individual investing advice from a team of financial advisors. If you have at least $250,000 in assets, you’ll receive your own personal team of two dedicated financial advisors.

2. Best for New Investors: Playbook

Playbook is designed to make financial planning easy and accessible for everyone. By creating an account and inputting your financial information, you can start to see a clear picture of your financial situation. By linking your investment and savings accounts, Playbook can provide you with personalized recommendations and insights to help you work towards your investing goals.

One of the key features of Playbook is the ability to adjust your risk tolerance and growth portfolio to fit your individual needs. Whether you're a conservative investor or looking for more aggressive growth, Playbook can help you tailor your investments to meet your specific goals.

With a cost of $9 per month for Playbook Essential or $59 per month for Playbook Plus, it is one of the most affordable options available. Playbook is particularly beneficial for high earners, as it can automate the optimization of savings to minimize overall tax burden.

3. Best for Customizable Auto Investing: M1 Finance

M1 Finance is a unique robo-advisor that uses a “pie investing” strategy to help you visualize your progress toward retirement savings, homeownership or your financial goals. It is an investment advisor.

When you sign up with M1 Finance, you’ll answer a few questions about your finances and investing preferences. From there, you can choose from 1 of 80 experts “investing pies” made up of a selection of stock and ETF “slices.” You can also create your own pie by selecting investments yourself.

When you make a deposit into your M1 Finance account, it will automatically split your investment according to your investing mix. You can schedule deposits on a weekly, monthly or annual basis.

There are no fees or commissions on basic M1 Finance accounts, and you can get started investing with as little as a $100 initial deposit.

4. Best for New Investors With Limited Time: Titan

Registering with Titan gives you access to a range of strategies that will invest your money wisely. You can review the FAQs or the Learn section if you want to know more about automated trading, or you can review the strategies currently offered:

• Flagship: The award-winning, U.S. large-cap strategy
• Offshore: The international all-cap strategy
• Opportunities: Identifies small-cap U.S. companies that can grow quickly
• Cryptocurrency: An investing strategy focused on crypto assets

With low minimum investment, no performance fee, SIPC insurance and no lockups, you can be certain your money is invested with wisdom and is protected. Plus, the company stands behind its investment advisor duty to grow its capital and yours. You can even reach out to their customer support team, ask questions and review your investing account at any time.

5. Best for Cost-Conscious Investors: SoFi Automated Investing

Automated investing through SoFi is known as “hands-off investing that’s always on.” SoFi Invest can help you set goals, whether you’re saving for retirement, saving for a house down payment or simply investing for later. The brand will rebalance your investments by adjusting your stock and bond funds quarterly and diversify your portfolio by allocating across several different investments and avoid as much risk as possible.

You can start investing through SoFi with as little as $1 and make one-time or recurring payments depending on what works best for your investment goals. SoFi Invest also gives you access to member benefits and discounts on other SoFi products.

Based on Reddit discussion, if you want a mix of automated and active investing, SoFi might be your move.

6. Best for Auto Trading: Streetbeat

Headquartered in Palo Alto, Streetbeat is a fintech platform that offers auto trading services across a range of assets; you can buy into stocks, ETFs, crypto and much more. Plus, the platform is designed to focus on you, the client. This means that you get the best information and support for each investment.

Streetbeat leverages AI technology and data solutions to help you build your portfolio, and along with these benefits, customers also get:

• Support for investors of all skill levels
• No trading commissions
• Low minimums (as low as $1)
• Bonus opportunities
• Less than a 1% management fee when using strategies build by Streetbeat

Yes, it’s true that fees could accumulate quickly on large accounts, but Streetbeat makes it easy for you to get in on the ground floor and build your portfolio with less risk and even less overhead.

7. Best for Long Term Investors: Magnifi

Magnifi is a marketplace that allows you, as the investor, to use common brokerage tools and AI to make the best decisions for your portfolio. Because you can pull up all the information you need on a given asset, you can easily invest using robo advisors in the assets that will give you the results you deserve and better match your strategy. Search for the investment options that meet your needs, invest in specific categories or scan for assets in a price range that’s affordable for you.

Best for long-term investors and those who require a bit of client support, you can also learn more about investing from this platform, utilize the AI-powered investing assistant, enjoy commission-free investing, try the mobile app and take advantage of over 15,000 possible investment portfolio options. This makes Magnifi a good place to trade for both seasoned and novice traders.

8. Best for Long Term Investors: Wealthfront

According to Reddit, If you're looking for a tried and true robo-advisor with a ton of investment options, Wealthfront would be a great choice. Wealthfront is one of the pioneers in the robo-advisory industry, with the aim of providing low-cost and efficient investment solutions to individual investors. Using advanced algorithms and computer-driven models, Wealthfront provides the rebalancing and diversification of portfolio that the clients need.

When you sign up for Wealthfront, you'll first complete a questionnaire to determine your financial goals, risk tolerance and time horizon. Based on your responses, Wealthfront's algorithms will create a personalized investment portfolio designed to maximize your returns while minimizing risk. It offers two tools to help you with your financial planning and investment management: Path and Autopilot.

Path focuses on comprehensive financial planning services and offers strategies for long-term wealth accumulation, retirement planning and college savings. Autopilot, on the other hand, emphasizes socially responsible investing by building portfolios that prioritize companies with positive environmental, social and governance practices. Both platforms have transparent pricing structures and user-friendly interfaces.

Additionally, the company offers a competitive interest rate for its cash management account, which is protected by the Federal Deposit Insurance Corporation (FDIC). Plus, there are no fees associated with it.

How Do Robo-Advisors Work?

Robo-advisor uses algorithms and automated software to manage and optimize investment portfolios. These platforms aim to provide personalized investment advice and portfolio management through technology, with minimal human intervention.

The process begins by collecting important information from the investor. This includes their financial goals, risk tolerance, time horizon and investment preferences. Based on this data, the robo-advisor algorithm utilizes complex algorithms to create a customized investment portfolio that aligns with the investor's objectives.

The algorithm takes into account various factors such as historical market data, asset correlations and risk models to determine the optimal asset allocation. It will consider a range of asset classes including stocks, bonds, exchange-traded funds (ETFs), and more. The goal is to build a diversified portfolio that maximizes returns while minimizing risk.

Once the portfolio is established, the robo-advisor continuously monitors the market and makes adjustments as necessary. For example, if the algorithm detects a deviation from the target asset allocation due to market fluctuations, it will automatically rebalance the portfolio to restore the desired allocation. This ensures that the investor's portfolio remains aligned with their goals and risk tolerance.

Pros and Cons of Robo-Advisors

Do you think that investing with a robo-advisor might be right for you? Let’s take a look at a few of the biggest advantages and disadvantages that come with using robo-advisors for this type of investment platform.

Pros of Robo-Advisors

• Assistance in choosing investment profiles: Robo-advising services provide easy and customizable investment options for beginners, with award-winning investment models based on investing goals and risk tolerance.
• Low fees: A major advantage of robo-advisors over human advisors is the low fees. On average, you can expect to pay between 0.25% to 0.50% of your total assets under management for your robo-advisor. On the other hand, most human financial advising services charge about 1% of your total assets annually for services. While this might not sound like a huge difference, it can add up over time and cut into your savings.

• Low minimums: Most human financial advisors have high minimum investments. Because these services charge around 1% of your total assets under management, it might not be worth it for an advising firm to take on clients with less than $250,000 in assets. Some registered financial advisors have minimum account balances as high as $1 million..

Cons of Robo-Advisors

• Don’t offer 100% personalization: Though robo-advisors are advanced and most offer a host of investing choices, they aren’t 100% personalized. A robo-advisor can’t offer you advice after a significant market drop and they may be able to provide limited advice if you have multiple financial goals. If you have a more complicated financial situation, you might need the human touch of a personal financial advisor.
• No face-to-face meetings: If you’ve never invested before, you might want the hand-holding that a human financial advisor can offer. When you invest with the best robo advisor, you can’t walk into an office or schedule a meeting with an advisor — you’re on your own with the tools your robo-advisor offers.

What to Look for When Choosing a Robo-Advisor

With so many robo-advisors available in the market, it can be overwhelming to choose which one is right for you. Here are some factors to consider to help you make an informed decision.

• Determine your investment goals: It's important to have a clear understanding of your investment objectives. Are you saving for retirement, buying a house, or simply looking to grow your wealth? Different robo-advisors may have varying investment strategies and asset allocations, so choosing one that aligns with your goals is crucial.
• Consider the fees: Robo-advisors typically charge a fee for their services, usually as a percentage of your assets under management. Compare the fees offered by different platforms and consider how they may impact your returns over time. While lower fees are generally preferred, make sure to also consider the value and quality of the services provided.
• Check account options: Most robo-advisors typically offer both taxable accounts and tax-advantaged accounts like IRAs. Some offers specialized options for a more niche account like an inherited IRA or a 529 plan.
• Assess the investment options: When considering a robo-advisor, look at the investment options available such as ETFs and individual stocks to ensure they align with your risk tolerance and investment preferences.
• Evaluate usability: Since robo-advisors are online platforms, it's important to choose one with a user-friendly interface and a seamless user experience. Check if the platform offers a mobile app for easy access and if it provides educational resources or tools to help you make informed investment decisions.
• Consider customer support and assistance: While robo-advisors are automated platforms, it's still important to have access to reliable customer support when needed. Look for a robo-advisor that offers responsive customer service through various channels, such as phone, email or live chat. Additionally, some robo-advisors also provide access to human financial advisors for more personalized assistance.
• Research the reputation and security: Before entrusting your money with a robo-advisor, do some research on the company's reputation and security measures. Look for reviews and testimonials from other users to gain insights into their experiences. Ensure that the robo-advisor implements robust security protocols to safeguard your personal and financial information.
• Consider additional features: Some of the best robo-advisors may offer additional features, such as tax-loss harvesting, automatic rebalancing or access to socially responsible investments. Assess these additional features and determine if they align with your preferences and goals.

Remember, choosing the best robo-advisor is a personal decision that depends on your specific needs and preferences.

Are Robo-Advisors Worth It?

Robo-advisors can be worth it for some investors, particularly those who are looking for a low-cost, hands-off approach to investing. Though they have their flaws, robo-advisors are an easy and accessible way to begin investing for the future. Most robo-advising services offer a surprising level of personalization, and you can get started investing in as little as 10 minutes.

If you are looking to get started with investing but feel overwhelmed by the options available, robo-advisors could be a good choice for you. Take the time to research and compare different platforms including our recommended robo-advisors, as well as other options such as Betterment and Vanguard Personal Advisor Services. Look into your account options and start investing today.

Frequently Asked Questions