Best Robo-Advisors for October 2024

The Bottom Line

Choosing the best robo-advisor for your personal goals, financial situation, and risk tolerance depends on many factors. When making this choice, among the most important considerations are the level of customization you need, the different account types that are available, whether access to financial planners is important to you, and whether you require integrated banking or brokerage services. Investment minimums and monthly maintenance fees are also critical considerations. Use this list of the best robo-advisors as a starting point to evaluate each platform. Then, continue your research by exploring our in-depth reviews of all of the major robo-advisors.  

All robo-advisors enable online account setup, but that’s where the similarities often end. Many digital wealth management platforms follow passive investment strategies attempting to match the overall growth of the market; however, different portfolio risk levels, allocation strategies, and customization methods often lead to varying portfolio performance.

Compare the Best Robo-Advisors

Why You Should Trust Us

Investopedia collected 1,239 data points from 21 robo-advisor companies to identify the most important factors to investors. We used this data to review each digital wealth management platform for fees, portfolio management services, goal planning tools, and other key features to provide unbiased, comprehensive reviews to ensure our readers make the right decision for their investing needs.

What Is a Robo-Advisor?

A robo-advisor is an investment platform that manages investments on an investor’s behalf using survey responses and algorithms. The algorithms that a robo-advisor uses to manage your portfolio are based on modern portfolio theory (MPT), which seeks to select investments to maximize returns within an acceptable level of risk through diversification. The information you provide to a robo-advisor, including your age, your investment timeline, and some proxy for your risk appetite, is fed into the MPT-based algorithm to find the ideal portfolio within the asset types offered by the robo-advisor.

Robo-advisors primarily differ from each other in their complexity and their asset offerings, in addition to the primary differences in account minimums and cost. More advanced robo-advisors can handle multiple portfolios on your behalf, with each portfolio representing a different investment goal and timeline. As for asset offerings, most robo-advisors create the majority of your portfolio using exchange-traded funds, but some offer actual direct asset purchases to accounts of a specific size. These direct-purchase assets can include shares, bonds, REITs, actively managed funds, and so on.

How to Choose the Best Robo-Advisor

Choosing the best robo-advisor is highly dependent on your financial situation. However, there are certain steps you can take to ensure you select the correct robo-advisor for your financial needs.  

• Step 1: Understand your financial goals. Are you focused on retirement, or are you planning to spend on a big purchase such as a house or car? Understanding what you are aiming for will help you choose the best robo-advisor. 
• Step 2: Understand the features that matter to you. If you need financial advice, seek out a hybrid robo-advisor with financial advisor access. Those seeking customization will prioritize that feature. Customer service access, fees, and cash management are other factors that might be considered.
• Step 3: Confirm how much you are willing to invest. Most robo-advisors will require a minimum funding amount; some are higher than others. For example, Charles Schwab requires a minimum of $5,000 to open a robo-advisor account. However, Wealthfront requires as little as $500 to get started. The amount you are willing to invest could be another determining factor in which robo-advisor you choose.
  

Understand Your Investment Goals

Human advisors have traditionally worked to help people understand their investment goals and needs. Similarly, robo-advisors can take you through helpful prompts and provide tools to help you properly fill in the details. In the end, however, their understanding of your financial situation and future plans is based mostly on what you input. In general, to get the most out of a robo-advisor, you need to do most of the work yourself, without the guidance of a human advisor. 

Every investor has different goals when it comes to buying a house, saving for retirement, paying for college (for yourself or a dependent), and so on. Depending on your age, you may need to prioritize certain goals over others. The more definition you can give to your goals, the better a robo-advisor will be able to support you. 

If you are in your 20s, for example, you may have goals like buying a house and saving for retirement on your list. Retirement is likely much further away when you are in your 20s and, given that it will most likely be decades until you will be drawing on retirement funds, you can be more aggressive with the funds for that purpose. Saving for a house, however, is ideally a shorter-term goal, with capital preservation being a priority that will temper your risk tolerance.

With a timeline and a target final dollar amount, most robo-advisors will be able to recommend a portfolio with a risk/return profile to get you there. The best robo-advisors provide you with tools to test out different variables and scenarios, like what happens if you increase your contributions or if the market has a few years of bad returns or a prolonged recession, and help nudge you to take actions that will increase your chances of success.

How to Compare Robo-Advisors

There are some general features that almost all investors value in a robo-advisor; depending on your experience level and account size, some features will be more important than others.

Robo-advisor features that investors should evaluate are:

• Goal planning
• Platform fees
• Range of features and customization
• Account services
• Portfolio management
• Attentive customer service
• Comprehensive education

Although cost is often the main focus, we found comprehensive goal-planning tools to be one of the most essential features of a robo-advisor. The best robo-advisors allow you to run scenarios on your goal planning, sync outside accounts for a more comprehensive financial picture, and prompt you to improve your chances of success. Beyond that, choosing the best robo-advisor comes down to your specific financial situation.

Generally, a younger person in their 20s saving for a single goal like retirement or buying a home will be able to make any robo-advisor work. Newer, younger investors will likely value robo-advisors with low account minimums, low fees, and basic capabilities.

Continuing the example above of an investor in their 20s looking to save for a house (near-term, preservation of capital) and retirement (long-term, growth-oriented)—this investor will probably begin looking for some universals like low fees and low account minimums. Some robo-advisors have tiers of fees where the fee goes up to give access to more features, so it is important to figure out whether you need the features of a higher tier or can make do with the basics so you can compare the options properly.

After that, this younger investor will want to look at how many of the low-cost platforms have tax-advantaged 401(k) or IRA accounts (or 403(b), rollovers, or other account types that specifically apply). Similarly, a person saving for college would likely prioritize those robo-advisors that offer 529 plans or custodial accounts. For those looking for basic account management services, however, no special account is required.  

As your life and finances become more complex, the ability to set multiple goals with different timelines may be more important than finding the cheapest robo-advisor. As your net worth grows and life moves forward, you may be willing to pay slightly higher fees for a platform that allows you to consolidate varied financial goals like building college funds for multiple children, saving for a variety of medium- and long-term purchases, and so on, in a single, robust robo-advisor that provides cash management and ongoing tax optimization.

In fact, if our hypothetical investor were in their 50s, for example, the goal of retirement and its robo-advisor requirements would shift more to include cash management, withdrawal planning, and calculators, which are less of a concern for investors in their 20s.

Robo-advisors are challenging to evaluate in a traditional investment sense because portfolio performance isn’t a key differentiator; almost all of them seek to mimic market returns with optimal diversification. This means it largely comes down to the features you need and the quality of those features. The good news is that the robo-advisor space continues to grow, and even investors with complex finances will still find several robo-advisors to choose from to meet their investment needs.

How to Open a Robo-Advisor Account

After an investor has decided that a robo-advisor is a good fit for their financial situation and determined which one to go with, the next step is to open an account. Although the requirements to open a robo-advisor account may vary between financial institutions, these steps are generally what investors can expect to follow. Fortunately, this process can be done online without needing customer support.

• Step 1: Create a robo-advisor account. When opening a robo-advisor account, the first thing you will need to do is input your personal information. Investors can expect to type in their name, address, phone number, email address, and Social Security number.
• Step 2: Establish your goals or risk tolerance. For a robo-advisor to automate an investor's financial needs, it must first know their goals and risk tolerance. Most robo-advisors utilize a questionnaire to understand better what the investor wants to accomplish. 
• Step 3: Fund the account. Once the robo-advisor account is established and the investor's goals are understood, the investor will need to fund the account. To do so, they will need to link their bank account by providing the necessary financial information such as the banking institution, checking or savings account number, and routing number.
• Step 4: Monitor your robo-advisor account. Once the robo-advisor is funded and investing on your behalf, you will want to monitor it from time to time. Even though some robo-advisors have rebalancing features, it's still best practice to manually ensure everything is in order and the account is actively abiding by your goals.

Robo-Advisors vs. Financial Advisors

While some investors are more concerned with choosing the best robo-advisor, there are still many people deciding between a robo-advisor and a human financial advisor. Simply put, the benefits of a robo-advisor, at its most basic, are a portfolio designed to modern portfolio theory (MPT) standards and some level of goal-planning support for a very low management fee. In contrast, the main benefits of human financial advisors tend to fall on the relationship side more than the technology or financial efficiency side. 

Financial advisors come in several forms, including fee-based, commissioned, and blended (a lower fee offset by commissions on some products). One strength that human advisors have is the ability to draw out important information over the course of a conversation, whereas a robo-advisor does everything, assuming that your survey responses are accurate.

Human advisors also tend to cover a wider range of topics outside of simple portfolio management. This can include taxation, budgeting, insurance, and even estate planning. Financial advisors can also help you stay on the course of a financial plan when you are tempted to deviate, especially when market conditions get tough. Over time, a financial advisor seeks to build a relationship with you to better understand your financial needs, both spoken and unspoken.

There are some more key differences that are worth covering, but we should note that these are generalizations and may not be true of every financial advisor or robo-advisor. Robo-advisors, which offer financial advisors, combine both services, typically for lower than average fees. Unfortunately, some of these hybrids require higher investment balances, although not all do. 

How Are Financial Portfolios Constructed

While robo-advisors strictly adhere to MPT because it makes up the core of their algorithms, financial advisors have more flexibility. If a financial advisor has a clear picture of your finances, they aren’t held to MPT. They may suggest concentrated exposure to certain asset classes and markets to offset concentrations in other places like savings bonds in banks, physical assets, real estate holdings, and so on. A financial advisor is also able to select investments outside the ETF universe, which is where most robo-advisors invest. This ability to make direct investments in specific segments of the market can lead to outperformance, as well as underperformance, versus the broader market.

The flip side of this freedom is that commission-based financial advisors may push you towards sub-optimal funds and investments that generate commissions. A robo-advisor doesn’t receive a commission and so will solely consider the fee burden and portfolio fit when selecting investments. Fee-based financial advisors avoid this issue as well, but higher AUM management fees can detract from returns. Finally, some commission-based advisors can appear to cost you nothing but end up with you having more expensive funds when cheaper, low-fee versions would have done the job. 

Performance and Portfolio Management

Because financial advisors have the ability to deviate from MPT, they have more variability in their performance than robo-advisors. As mentioned earlier, portfolio performance isn’t a very good differentiator for robo-advisors because they typically seek to return roughly market rates through a diversified portfolio. A financial advisor can outperform or underperform the market and will likely do a bit of both over time.

A robo-advisor’s edge over a financial advisor is in lower fees along with clear investment decisions and rules-based portfolio management rather than performance. You may never beat the market, but you will have confidence that your portfolio is being regularly rebalanced to keep it optimized and may even be harvesting tax losses to offset taxable gains on a regular basis.

Robo-Advisor Cash Management Accounts

As market interest rates rise, high-yield cash accounts grow in appeal. As the investment management landscape has grown increasingly competitive, many robo-advisors have made fee-free, high-yield cash accounts available through their existing suite of offerings. These offers are typically provided through the firm's association with one or more partner banks. By using multiple banks, some robo-advisors can offer more than the standard $250,000 FDIC insurance. Most of the high-yield cash accounts offer comparable returns and adjust quickly as the Fed raises or lowers rates. 

Best Robo-Advisors for Uninvested Cash

Wealthfront

Wealthfront Cash Account offers three account types: individual, joint, and trust. To open an account, all you need is $1. The interest rate fluctuates with market interest rates and currently pays 5.00% on the entire balance (5.50% when you refer a friend). Through partner banks, each account receives up to $8 million in FDIC insurance ($16 million for joint accounts).

Features include:

• Receive funds from paycheck two days in advance with direct deposit
• App-based check deposits
• Bill pay
• Debit card with access to 19,000 no-fee ATMs
• Active fraud monitoring

Titan

Titan Smart Cash distinguishes itself from the rest of the robo-advisors’ high-yield cash accounts. In the current environment of changing interest rates, it’s tough to know if you’re receiving the best available return on your cash. Titan Smart Cash solves this problem by searching daily across the available high-yield Treasury and cash options to find the best rate for you. Titan considers your tax rate as well to make certain that you’re receiving the best after-tax yield, up to a 4.98% maximum. 

Features include:

• Yields shown are net of fees; regular advisory fee applies
• SIPC insured up to $250,000 for cash balance
• Withdrawals are completed within three to four days
• Predominantly invested in the safest Treasury funds
• Earning the highest yields might require higher minimum investment amounts

Betterment

Betterment offers two cash management products, Checking and Cash Reserve, through partner banks. Betterment Cash Reserve is the high-yield cash offer, currently paying a 4.75% variable annual percentage yield (APY).

Features include:

• Up to $2 million FDIC insurance through program banks ($4 million for joint accounts)
• Unlimited withdrawals
• No minimum balance requirement, and just $10 to begin earning interest
• Automated tools to enable multiple saving goals

How We picked the Best Robo-Advisors

Providing readers with unbiased, comprehensive reviews of digital wealth management companies, more commonly known as robo-advisors, is a top priority of Investopedia. We used our 2023 consumer survey to guide the research and weightings for our 2024 robo-advisor awards. To collect the data, we sent a digital survey with 64 questions to each of the 21 companies we included in our rubric. Additionally, our team of researchers verified the survey responses and collected any missing data points through online research and conversations with each company directly. The data collection process spanned from Jan. 8, to Feb. 9, 2024.

We then developed a quantitative model that scored each company to rate its performance across nine major categories and 59 criteria to find the best robo-advisors. The score for each company’s overall star rating is a weighted average of the criteria:

• Goal Planning - 21.00%
• Portfolio Contents - 17.00%
• Portfolio Management - 17.00%
• Fees - 15.00%
• Account Services - 10.00%
• Account Setup - 5.00%
• Customer Service - 5.00%
  
• Security & Education - 5.00%
• User Experience - 5.00%

Additionally, during our 2023 research, many of the companies we reviewed granted our team of expert writers and editors access to live accounts so they could perform hands-on testing.

Through this all-encompassing data collection and review process, Investopedia has provided you with an unbiased and thorough review of the top robo-advisors.

Read more about how we research and review robo-advisors.

The above material and content should not be considered to be a recommendation. Investing in digital assets is highly speculative and volatile, and only suitable for investors who are able to bear the risk of potential loss and experience sharp drawdowns. Digital assets are not legal tender and are not backed by the U.S. government. Digital assets are not subject to FDIC insurance or SIPC protections.

Dotdash Meredith receives cash compensation from Wealthfront Advisers LLC (“Wealthfront Advisers”) for each new client that applies for a Wealthfront Automated Investing Account through our links. This creates an incentive that results in a material conflict of interest. Dotdash Meredith is not a Wealthfront Advisers client, and this is a paid endorsement. More information is available via our links to Wealthfront Advisers.

Guide to Robo-Advisors

Learn more about robo-advisors:

• Are Robo-Advisors Worth It?
• How to Automate Your Investing
• Automated Investing Essentials
• How to Open a Robo-Advisor Account
• How to Evaluate a Robo-Advisor
• New Ways to Buy ETFs Online
• Is a Robo-Advisor Right for You?
• Robo-Advisor: Advantages and Disadvantages
• Robo-Advisors and Young Investors
• What Robo-Advisors Can and Can’t Do for Investors
• ETFs vs. Robo-Advisors: What’s the Difference?