Best Robo-Advisors of 2024: Features, Performance, and Fees (2024)

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Robo-advisors are automated online brokerage accounts that employ a passive investment strategy. These digital trading platforms offer a modern approach to investing in the stock market and have gained popularity among beginners.

Robo-advisors provide accessible and cost-effective investment strategies. Unlike traditional broker services, robo-advisors eliminate the need for more costly human advisors, making them a viable option for a wider range investors. Investing through a robo-advisor could be a method of generating passive income.

Best Robo-Advisors of 2024

• Betterment: Best overall
• Fidelity Go: Best for beginners
• Wealthfront: Best for socially responsible investing
• SoFi Invest: Best for complimentary CFP access
• Charles Schwab: Best for account flexibility
• E*TRADE: Best for mobile
• Vanguard: Best for retirement plans
• Interactive Brokers: Best portfolio selection

Comparing Top Robo-Advisors

The best robo-advisors offer low fees, extensive portfolio options, flexible account types, and easily accessible customer service. With automated investing platforms, you can invest in various assets, including mutual funds, index funds, crypto, etc.

Here are the best robo-advisors (aka automatic investing platforms) that Business Insider's editors picked in 2024.

Betterment Robo-Advisor

Best for: All passive investors

Betterment is the overall best robo-advisor. It's at the top of our list for its low fees, diverse investment products, account flexibility, and portfolio options (including cryptocurrency portfolios).

Betterment offers two plans: digital and premium. This robo-advisor also offers access to CFPs, but you can only take advantage of unlimited guidance if you're enrolled in its premium plan. You won't need a minimum amount to set up its digital plan, but you'll need to meet a high minimum deposit requirement for the robo-investing premium plan.

Cons: If you don't have at least $100,000, you won't get unlimited access to a CFP; you'll have to pay for each consultation.

Betterment review

Fidelity Go

Best for: Beginner Investors

Fidelity Go is the best robo-advisor for beginners that offers low-cost personalized portfolios based on answers from a short questionnaire about risk tolerance, investing goals, and time horizons. Plus, it only has a $0 minimum and generally low fees.

Most robo-advisors use investment funds (ETFs or mutual funds) with expense ratios. One of the best parts about Fidelity Go is that it is also one of the best robo-advisors for low fees. The platform relies on mutual funds (i.e., Fidelity Flex mutual funds) that don't contain expense ratios.

Cons: Fidelity Go doesn't offer tax-loss harvesting, and those over $25,000 must pay a 0.35% advisory fee. You also don't get access to human advisors unless you have at least $25,000 in your account.

Fidelity Go review

Wealthfront Robo-Advisor

Best for: Socially Responsible Investing

Wealthfront Investing is a pioneer in the robo-advisor space, similar to Betterment. If you have at least $100,000 to invest, you can access Wealthfront's US direct indexing and risk parity investing strategies. Direct indexing allows you to harvest losses on individual stocks to reduce your overall tax liability.

Wealthfront offers socially responsible portfolios, tax-loss harvesting, smart beta investing, and risk parity portfolios. While it's great for those who want exposure to cryptocurrencies, it protects your portfolio against risk by only allowing an allocation of 10% for crypto trusts.

Wealthfront also now offers an automated high-yield bond portfolio which hands-off traders can get a customized low-cost bond ETF portfolio. Wealthfront Automated Bond Portfolio pays a 5.50% yield, which is even higher than Wealthfront's cash account, which pays 5.00% APY.

Cons: You won't get access to ongoing, one-on-one advisor consultations at Wealthfront, and you'll need at least $100,000 to use strategies like direct indexing and risk parity.

Wealthfront review

SoFi Robo-Advisor

Best for: Complimentary CFP Access

SoFi's robo-advisor has several perks: It has a $0 account minimum, doesn't charge any fees, and provides complimentary CFP access. And like several other investment platforms mentioned in this list, you can also invest on your own, thanks to SoFi's active investing accounts.

In addition to automatic portfolio rebalancing and goal planning, the robo-advisor invests your funds into a diversified mix of SoFi and non-SoFi ETFs. SoFi's robo-advisors also support multiple accounts, including individual and joint accounts, traditional IRAs, Roth IRAs, SEP IRAs, and 401(k) rollovers.

Cons: SoFi Invest® automated portfolios don't offer tax-loss harvesting.

SoFi Invest review

Charles Schwab Robo-Advisor

Best for: Account Flexibility

Charles Schwab's most basic automated investing account, Schwab Intelligent Portfolios, offers personalized, self-managing ETF portfolios. While this robo-advisor's account minimum is higher than most other robo-advisors, it makes up for its lack of advisory fees.

The automated accounts also offer automatic rebalancing, and it re-adjusts your portfolio's target allocation any time you add or withdraw money. Schwab Intelligent Portfolios gives you access to more than 51 ETFs (including Schwab ETFs), and it supports individual and joint accounts, trusts, custodial accounts, and IRAs.

You can even use tax-loss harvesting, but this feature is only available to those with at least $40,000 in their robo accounts.

Cons: You'll need at least $5,000 to set up a robo account.

Schwab Intelligent Portfolios review

E*TRADE Robo-Advisor

Best for: Mobile

E*TRADE Core Portfolios is E*TRADE's robo-advisor, requiring a $500 minimum and 0.30% annual fee. You can use tax minimization strategies, socially responsible and smart beta portfolio options, and multiple account types (i.e., you can automate individual and joint accounts, custodial accounts, and IRAs).

E*TRADE's automated investing mobile app allows commission-free trading of stocks, ETFs, mutual funds, and options. The app lets users manage their money, transfer cash, deposit checks, and pay bills. The robo-advisor also includes Bloomberg TV, which gives investors third-party research and news updates.

Cons: You can't be able to speak with a human advisor unless you've got at least $25,000, and the annual fee exceeds that of many competitors.

E*TRADE review

Vanguard Robo-Advisor

Best for:Retirement planning

Vanguard Digital Advisor is one of the two automated investing accounts (the Vanguard Personal Advisor Services account is the other option) online brokerage Vanguard provides.

This robo-advisor mainly allocates your assets across four Vanguard ETFs. These include the Vanguard Total Stock Market ETF, Vanguard Total International Stock ETF, Vanguard Total Bond Market ETF, and Vanguard Total International Bond ETF. You'll be subject to expense ratios.

In addition, Vanguard Digital Advisor supports individual and joint accounts, traditional IRAs, Roth IRAs, rollover IRAs, and eligible Vanguard-administered 401(k) retirement accounts. The robo-advisor also offers retirement tools and resources like tax-loss harvesting and socially responsible investing options.

Cons: Vanguard Digital Advisor has a $5,000 account minimum.

Vanguard Digital Advisor review

Interactive Advisors Robo-Advisor

Best for: Portfolio Selection

Interactive Advisors is Interactive Brokers' automated investing account. While fees and minimums can be on the higher end with this robo-advisor, one of the highlights of this account is that it offers more a wide range of portfolios.

In addition, the robo-investing platform provides four different ETF portfolio options: asset allocation, actively managed, smart beta, and socially responsible. The asset allocation portfolios focus your funds into a diversified portfolio, but Interactive Advisors' actively managed portfolios utilize the expertise of its team and registered investment advisors (RIAs).

With its smart beta portfolios, you'll gain exposure to a strategy that seeks higher returns, and its socially responsible option (ESG portfolio) invests in companies that positively impact the world.

Cons: Investment minimums and fees for actively managed portfolios are higher. You may need as much as $50,000 to get started with this automated investing platform.

Interactive Brokers review

Introduction to Robo-Advisors

Robo-advisors use AI algorithms to customize and manage automated investment portfolios. Investment managers and brokers have been using robo-advisors since the 1980s. But now, consumers can use these robo platforms directly, making investing more accessible for beginners.

How Robo-Advisors Work

The algorithms used by robo-advisors were designed to choose investment options that maximize returns for investors without subjecting them to unnecessary risk. Moreover, the AI incorporates your individual risk tolerance, time horizon, and investing goals to customize your portfolio.

Still, robo-advisors require ongoing maintenance and rebalancing to keep investments on track to reach goals. They are typically created by professional financial advisors who implement long-term growth earning and risk-adjusted strategies into the algorithms.

Additional Features and Services

Robo-advisors come with various helpful features and services that help beginners and passive investors make informed investment decisions without being overwhelmed. Some of the best services and features of robo-advisors include automatic rebalancing, access to human advisors, curated ETF portfolios, long-term portfolio projections, and tax-loss harvesting.

Getting Started with a Robo-Advisor

You can open some of the best robo-advisor accounts online or through a traditional brick-and-mortar brokerage firm. Traditional, in-person broker firms are often best suited for higher balances and may charge more fees. Online robo-advisors, however, tend to have lower fees and are suitable for smaller balances.

You must provide basic personal information to open a robo-advisor investment account. This may include your name, age, address, Social Security number, and bank information. Once you sign up, you can start depositing funds and investing.

The best robo-advisor for you varies depending on your risk tolerance, time horizon, and how much you're willing to invest. You'll also want to research robo-advisors that offer features like tax loss harvesting, automatic portfolio rebalancing, 24/7 customer support, low fees, and socially conscious investing options.

Choosing the Right Robo-Advisor

Robo-advisors are popular automated investment platforms for passive and beginner investors looking for accessible market access and hands-off trading strategies. A robo-advisor is generally a cost-effective method of investing with low fees and minimum deposits.

When choosing the right robo-advisor, look for a platform offering diverse investment options and features that best suit your needs, whether for tax-efficient investing with robo-advisors or robo-advisors with human advisor access. Robo investing platforms mainly offer ETFs, but other advisory platformsmay also offer other asset classes like stocks, mutual funds, and options.

Robo-Advisor FAQs

We interviewed the following investing experts to see what they had to say about the best robo-advisors.

• Sandra Cho, RIA, wealth manager, and CEO of Pointwealth Capital Management
• Tessa Campbell, Investment and retirement reporter at Personal Finance Insider

What are the advantages/disadvantages of investing through a robo-advisor?

Sandra Cho:

"Advantages include:

• On-demand general guidance: In my experience, robo-advisors are best used as a starting point to determine risk tolerance and get a handle on your financial situation and a broad roadmap to what you need to do. Sometimes you just need a catalyst to get moving in the right direction.
• Simple to use.
• Feeling of control: There is no concern about hurting a person's feelings if you don't take their advice, and you don't feel rushed or pressured."

"Disadvantages of using a robo-advisor

• No one is second-guessing you. Sometimes, you need someone to read between the lines. Maybe you think you are an aggressive investor who can tolerate high risk, but you pull all your money out the minute your portfolio goes down. The risk tolerance result I get if clients complete the questionnaire alone is significantly different than when I walk them through the questionnaire.
• Lack of EQ, or emotional IQ. EQ is sometimes more important than IQ. It's hard for a robo-advisor also to tell you what you don't know that you don't know. It's hard for a robo-advisor to help you work through concerns, fears, and anxiety and help keep you invested through turbulent markets and life events that inevitably affect your financial path."

Tessa Campbell:

"Robo-advisors do the hard, time-consuming part of investing for you. Once you set your goals, risk tolerance, and time horizon, a robo-advisor can create a customized investment portfolio based on those characteristics. This makes these platforms accessible to beginners and ideal for passive investors.

"Robo-advisors also tend to be the better option for folks wanting low-cost investing as most robo-advisors mainly trade ETFs.

"However, robo-advisors can be limiting. You won't get the same level of control or influence over your assets as you would with self-directed investing or a professionally managed platform. If you want to pick and choose how you invest your money, then a robo-advisor isn't the best option for you."

Who should consider opening a robo-advisor?

Sandra Cho:

"Someone who is a DIY investor and is tech-savvy enough to use the software involved. Larger groups of people need to be processed faster, such as participants in a 401(k) or other retirement plan.

"Investors who have smaller amounts of assets might not have the need for sophisticated financial planning."

Tessa Campbell:

"Robo-advisors are best for beginners and passive investors who don't want to be glued to their computers, watching the ups and downs of the market and trying to decide when is the best time to buy and sell.

"It's also the better option for cost-conscious investors. With a robo-advisor, you can easily and affordably get exposure to different sectors of the market with low-cost ETFs. This way, you're paying the price of individual stocks."

Is there any advice you'd offer someone who's considering opening a robo-advisor?

Sandra Cho:

"1) Treat it like a starting point, not the endpoint.

2) Find a good one. Not all robo-advisors are the same. Like financial advisors, there are good and bad ones.

3) Be aware of the investments you have, and do not have, through the robo-advisor you use. For example, if you are using a robo-advisor at a particular investment company, that robo-advisor will likely limit their recommendation to the mutual funds or other investments of only that company."

Tessa Campbell:

"Make sure to compare all the robo-advisor options before opening an account. Not all robo-advisor provide the same investment options, account types, or features. And while many robo-advisors have low-trading fees and account minimums, not all of them do, so make sure you know what you're getting into before opening a brokerage account with an automated investment platform.

"On a different note, make sure that you still frequently monitor your investment portfolio. Although you won't do much on the day-to-day, it's important to update your portfolio based on your current goals, financial situation, and market performance."

Methodology: How to Choose a Robo-Advisor

Business Insider's methodology for rating investment platforms was used to analyze and compare dozens of robo-advisor platforms. The best robo-advisor platforms feature some of the lowest fees, multiple portfolio types, human advisor access, and excellent customer service.

We also favored platforms that offered a range of other features and products, such as tax-loss harvesting and flexible account types. Investment platforms are given a rating between 1 and 5.