Best Robo -Advisors For 2021: How To Invest
Do you want to get the most out of your finances by 2021? Investing is one of the best ways to make money from money. However, if you start with cold financial planning, working with a financial advisor can be of great help. However, financial advisors usually spend a lot of money. There’s another, less expensive option: Robo advisors.
Is 2021 the year you started investing? Try it with one of the best Robo-advisors available today.
Robo Advisors is an online financial investment platform that creates and manages an investment portfolio based on your unique needs and financial goals. No need for human financial advisors or confusing financial advice. You don’t need a lot of investment skills. Instead, it only takes a few dollars to answer a few questions about your investment style. It’s like having a financial advisor on call – when the financial advisor is a robot and uses AI to make smart portfolio decisions.
When you sign up with a Robo advisor, you answer several questions about your financial plan and the type of investor you are. You may need to consider factors such as your risk tolerance and when you plan to take advantage of your investment. It provides the Robo-investing platform with the information you need to build your ideal investment portfolio that will continue to grow as the market changes, your financial plans, investment opportunities, overall finances, and your risk tolerance. It will also help you have a diversified portfolio that is best set up to meet your financial goals, such as to ensure you are making enough money to add to your retirement account. The interactive Robo-advisor can also help you understand your investment options and understand concepts such as socially responsible investing.
Robo-advisors (which include big names like Betterment and Wealthfront) are ideal investing solutions for first-time investors, people who don’t have a lot of time for portfolio management, and for those who are turned off by other, high management fee or advisory fee options that come with a traditional financial advisor. But they aren’t the only options available for planning your investment strategy. If you have a specific Robo-advisor in mind, you can use the same criteria to see if it meets your expectations.
How we chose the best Robo-advisor
To determine the best Robo-advisor out there, we reviewed them based on:
- Minimum account opening balances and ongoing balances (if any)
- The number of fees and their costs
- Variety of investment accounts available
- Access to a human investment manager (for financial advice and technical support)
If you’re a hands-on investor or feel strongly about going to a human financial planner for investment advice, Robo investing probably isn’t for you. Instead, try using a portfolio manager or selecting your portfolio investments yourself. But if you prefer the hands-off approach to a managed portfolio, a Robo-advisor might work for you. Here are the best Robo advisor options:
- Betterment: Best for beginners.
- Wealthfront: Best for the lowest fees.
- SoFi: Best for extra perks.
- Ellevest: Best for women.
- Acorns: Best for micro-investing.
- TD Ameritrade: Best for traditional investors.
Many of the best Robo-advisors have a lot in common, but the best robocalls advisor service for you depends on the type of investor you are. Review our picks to choose the right Robo advisor service for you.
Betterment: Best for beginners
Betterment was one of the first Robo-advisors and has stood the test of time to be one of the most popular financial planning Robo-advisors among users. With Betterment, you only pay one fee — 0.25% annually on your balance (or $25 for every $10,000 you have). Betterment also offers a premium tier: a 0.40% annual fee, which includes unlimited access to certified financial planners and advice on all your investments — even those that aren’t with Betterment. Thanks to automatic rebalancing and tax-loss harvesting, you won’t hang onto assets that aren’t working their hardest for you. Tax-loss harvesting is when a security is sold at a loss and a similar one is bought to replace it, offsetting taxable gains and income. Along with that, the $0 minimum balance means you can get started right now.
Wealthfront: Best Robo-advisor with the lowest fees
Wealthfront and Betterment are two of the biggest Robo-advisors available. I’ve had an investment portfolio account with Wealthfront for years and I’m happy with what its asset allocation platform offers. I signed up quickly, easily moved money in and I love my monthly reports about how my portfolio is doing. I can make asset adjustments as necessary, like if I want to have more conservative investments or riskier ones.
Wealthfront offers stock level tax-loss harvesting where individual stocks that are losing your money get moved around for more favorable ones. This is good news for stock investors because you get the benefit of minimizing your taxable gains with your higher-risk stock investments. This, plus many of the enhanced features are available in your account is over $100,000. For example, Smart Beta (for portfolios $500,000 and up) uses many different risk factors to determine the weight of investments in your portfolio. It analyzes value, dividend yield, and volatility, among others. But you don’t need to pay a higher annual fee to access them, just more money in your investment account.
SoFi: Best for extra investing perks
SoFi is best known for handling loans, but it’s recently gotten into financial investments as well. SoFi doesn’t charge any fees for automated investing and you have access to financial experts anytime through email, phone, or chat. Like Betterment and Wealthfront, SoFi is a fiduciary, which means it won’t sell you unnecessary products or give you financial advice that doesn’t work for you. You can start investing with as little as $1 right now. With no advisory, administrative, or other account fees, your investment money goes to your investments, not to someone or something managing it. No matter your account portfolio balance, you have free, unlimited access to human-certified financial planners in case you need specific financial planning help. With Betterment, it comes with an extra fee.
Ellevest: Best for goal-based investing
Ellevest was created by women especially for women — although anyone can sign up. Having launched with a fee-based model, Ellevest has now shifted to a flat monthly membership fee. For $1 a month, the Essential plan gives you access to investing and banking tools, educational materials, and a 20% discount on the company’s coaching service (sessions start at $125). The Plus plan, which costs $5 a month, adds personalized retirement account planning. And the $9 per month Executive tier accommodates multigoal investing and management of up to six investment accounts.
The Ellevest algorithm bases your asset allocation investments on your salary, gender, and expected lifespan. Since women historically earn less than men do — and live longer — an Ellevest portfolio reflects that. You have the option to select impact portfolios or companies that match your investment goal. Not every investment management company offers sustainable, responsible, and impact investing. It’s a way for women to invest in women, furthering their economic growth and sustainability
Acorns: Best for micro-investing
Acorn is a micro-investment platform. It doesn’t need a lot to start your investment or keep it growing. If all you have are minor backup changes, consider Acorns. This Robo advisor rounds up your transaction to the nearest dollar and submits the remaining changes to your investment account. There are no minimum account balances or trading fees as with some other offers. However, the main account costs $ 1 per month and you invest the rest of your money through an automatic circular window program. When you purchase a linked card, your transaction will be rounded up to the nearest dollar and the remainder of the change will go to your Acorns investment account. This puts the investment in your hands, you don’t even have to worry about typing for a minimal investment contribution. It’s great if you don’t have a lot of money to invest right now but want to get started anyway.
There’s also a $ 3 a month personal account that has multiple accounts combined into one, including investing, retirement, verification, and physical debit cards. Get investment accounts for kids, as well as investment, retirement, and checking accounts with the family plan for $ 5 per month.
TD Ameritrade: Best for the traditional investor
The Essential Portfolios from TD Ameritrade is the investment company’s Robo-advisor option. The $500 minimum balance and 0.30% annual fee are like its competitors (Wealthfront and Betterment charge 0.25%) and the traditional brokerage gets you a host of investment portfolio asset allocation options. For instance, you get a Robo-advisor but still have access to financial investment management experts to help you sort out your investment questions and concerns.
You can also choose socially aware investing, like Ellevest’s impact portfolios. When you go with TD Ameritrade, you have your pick from more than a dozen different types of financial planning investment accounts, including:
- Individual brokerage
- Traditional IRA
- Roth IRA
- Rollover IRA
- Minor IRA
- Minor Roth IRA
- SEP IRA
- SIMPLE IRA
- Beneficiary IRA
- Individual 401(k)
- 529 college savings plan
- Uniform Transfers to Minors Act/Uniform Gifts to Minors Act
Plus a slew of other types of investment accounts, like joint and minor accounts. The wide variety of portfolio options means you can open nearly any account you want with only a few hundred dollars. If you want the comfort of having a longstanding investment company while still taking advantage of a Robo-advisor, TD Ameritrade is a solid choice.
Robo-advisor is a great opportunity without investing a lot of money or time. If you know that investing is important but you don’t want to do a lot of work (or money) then a robot advisor can work for you.