Best robo-advisors of 2023

Want a simple way to invest without managing it yourself? Robo-advisors are automated investing apps that help you build a balanced investment portfolio for a fraction of the cost of a traditional financial advisor.

There are quite a few options to choose from, and each robo-advisor has its own focus. Some offer low fees (or none!), others have a huge selection of portfolios to choose from, and a few are designed for high-net-worth individuals.

I’ve reviewed nearly two dozen options to find the best robo-advisor platforms for different types of investors. And I won’t pull any punches. While the list below represents the best of the best, there are downsides to each, so be sure to pay attention to those before making a decision.

Overview: Best robo-advisors

• Best for beginners: Acorns
• Best for low-cost ETFs: Vanguard Digital Advisor®
• Best for Roth IRAs: Betterment
• Best for tax-loss harvesting: Wealthfront
• Best for 401(k) accounts: blooom
• Best for low fees: SoFi Automated Investing
• Best for DIY investors: M1
• Best for high-net-worth individuals: Empower

Acorns: Best robo-advisor for beginners

Management fees: $3 or $5 per month
Account minimum: $0
Promotions: $10 sign-up bonus, terms apply

Acorns makes investing easy for beginners by simply rounding up purchases to the nearest dollar and investing the difference. Add to that a simple onboarding process and well-balanced Acorns portfolios consisting of low-cost index funds, and Acorns is a great way to help new investors build a solid investment plan without much work.

Acorns offers the standard robo-advisor features, such as recurring investments (as little as $5 at a time), automatic portfolio rebalancing, and dividend reinvestment, as well as discounts at online retailers for ordering through their shopping portal. The monthly fee can be costly, though, especially if you have a small amount invested, in which the fees might erase your gains.

Pros

• Well-designed mobile app
• Invest spare change with Round-Ups®
• Decent selection of low-cost index funds
• Lots of educational resources

Cons

• High monthly fee compared to other robo-advisors
• Limited customization of investments

Open an account with Acorns or read our full Acorns review.

Vanguard Digital Advisor®: Best robo-advisor for low-cost ETFs

Management fees: Net of approximately 0.15%
Account minimum: $3,000
Promotions: 90 days with no advisory fee, terms apply

Vanguard is one of the strongest names in the investing world, and for good reason. With rock-bottom fees, access to a variety of index funds, and a member-owned business structure, Vanguard is always looking out for its members. The Vanguard Digital Advisor® service is an entry-level robo-advisor that offers simple tools and access to broadly diversified, low-cost ETFs.

The expense ratios on the Vanguard ETFs average around 0.05% annually, meaning you are only charged $5 for every $10,000 Vanguard manages. Vanguard Digital Advisor® automates the process by rebalancing the portfolio as needed and facilitating recurring investments. The approximate 0.15% annual fee is lower than most robo-advisors too, keeping the overall costs to a minimum.

There are some additional tools as well, including a debt payoff tool, and a dashboard that tracks your progress toward retirement and other goals. Overall, Vanguard offers a simple approach to retirement planning, and keeps fees lower than competitors.

Bonus: If you want access to a human advisor, Vanguard lets you upgrade your Digital Advisor® to its Vanguard Personal Advisor Services® offering, giving you unlimited access to Vanguard financial planners for only an annual fee of up to 0.30% ($50,000 minimum investment).

Pros

• Simple retirement planning tools
• Very low fees
• Automated management
• Access to famous Vanguard ETFs

Cons

• Limited investment selection
• No tax-loss harvesting

Open an account with Vanguard Digital Advisor® or read our full Vanguard Digital Advisor® review.

Betterment: Best robo-advisor for Roth IRAs

Management fees: 0.25% or 0.40%
Account minimum: $10 to start investing
Promotions: Up to one year of free management, terms apply

Betterment offers a suite of financial planning tools and access to both standard brokerage accounts and retirement accounts. The Betterment Roth IRA has a large selection of portfolio options to invest in.

Betterment boasts a low 0.25% management fee, which gives you access to all of its planning and goal-setting tools, as well as ETFs in over a dozen asset classes. Betterment also has a Premium plan for high-net-worth individuals, offering access to CFP® practitioners and full-service financial planning for an additional 0.15% annual fee. For retirement accounts, Betterment is one of the best all-around robo-advisors available.

Pros

• Low advisory fee (0.25%)
• Goal-setting and planning tools built into app
• CFP® access for a relatively small additional fee

Cons

• No access to REITs
• Premium plan requires $100,000 minimum

Open an account with Betterment or read our full review of Betterment.

Wealthfront: Best robo-advisor for tax-loss harvesting

Management fees: 0.25%
Account minimum: $500
Promotions: $5K managed for free, terms apply

Wealthfront offers some of the more sophisticated investing tools of any robo-advisor, including Smart Beta, direct indexing, and advanced tax-loss harvesting. In fact, in taxable accounts with more than $100,000 invested, Wealthfront offers stock-level tax loss harvesting on a daily basis.

Wealthfront also offers quite a few other notable perks for a robo-advisor, including portfolio loans on taxable accounts, access to ETFs in 11 different asset classes, and a free financial planning and goal-setting tool called “Path.” Wealthfront also offers a cash account with a high interest rate and up to $5 million in FDIC insurance.

Wealthfront may be the most complete robo-advisor service available today, and with a low annual fee, it’s also one of the best.

Pros

• Multiple ways to lower taxes
• Access to free financial planning tool
• Access to portfolio loans
• Low overall fees for management and funds

Cons

• No fractional share investing
• Relatively high account minimum to open ($500)
• Can’t access best tax savings with under $100K balance
• No access to human advisors

Open an account with Wealthfront or read our full Wealthfront review.

blooom: Best robo-advisor for 401(k) accounts

Management fees: $0 to $295 annually
Account minimum: $0
Promotions: N/A

blooom is one of the only robo-advisors that connects to your 401(k) or other workplace retirement account to help you analyze your fees and investment choices. It can also manage IRA accounts as well, helping build a diverse retirement portfolio between both accounts.

blooom offers a free analysis by simply connecting your retirement accounts to the service, and will provide insights on your current investments and call out any high fees you are currently paying. There are three tiers to its paid service, with the two higher tiers giving you access to licensed financial advisors.

blooom does come with an annual flat fee (instead of charging a percentage of your investments) for investment recommendations or active management. But this can make it cheaper for you if you have a larger investment balance. These plans start at $120 per year and go up to $295 annually.

Pros

• Management of 401(k) and other workplace retirement accounts
• Free portfolio analysis and planning tools
• Can fully automate investments
• Access to human advisors

Cons

• Costly for users with small account balances
• Cannot manage standard brokerage accounts
• Non-custodial (they aren’t a broker themselves, but place trades on your behalf)

Open an account with blooom or read our full blooom review.

SoFi Automated Investing: Best robo-advisor for low fees

Management fees: None
Account minimum: $0
Promotions: N/A

SoFi offers a unique robo-advisor service, with no management fees, fully-automated investing, and access to human financial advisors and career counselors at no extra cost. The only fees you pay are the expense ratios for ETFs in the portfolio, but SoFi also waives the fees on the SoFi-owned funds for users.

SoFi offers access to a wide selection of investments, with ETFs in a dozen asset classes, and the ability to open both taxable and retirement accounts. The platform has standard robo-advisor services (such as automatic rebalancing, recurring investments, etc.), but also lets you hop on a call with a licensed financial advisor for advice on how to invest and save toward your goals.

SoFi is an all-in-one finance company that also administers other financial products, such as student loan financing, personal loans, a rewards credit card, crypto investing, and even full banking services. Members that utilize the SoFi Automated Investing service receive discounts on other SoFi products (such as lower rates on loans).

Overall, SoFi is the lowest-cost robo-advisor around, and is designed to help you with more than just investing.

Pros

• No management fees
• Large investment selection
• Access to financial planner and career counselors (for free)
• Discounts on other SoFi products

Cons

• No tax-loss harvesting
• Utilizes SoFi ETFs in portfolios, which don’t have a long track record

Open an account with SoFi automated investing.

M1: Best robo-advisor for DIY investors

Management fees: $0 ($125/year for M1 Plus)
Account minimum: $100 ($500 for retirement accounts)
Promotions: N/A

M1 is not a typical robo-advisor, but does offer automated investing solutions through its platform and mobile app. M1 Finance is an investing app that allows users to create their own investing “pie,” which is just a simple way of saying portfolio. M1 Finance also offers “Expert” pies, which are pre-made investing portfolios selected by experts, according to different investing styles. You can also choose to copy the portfolio of other users that share their custom pie on the platform.

When you invest, M1 Finance automatically divides the money up between the different investments in your pie, and automatically keeps the asset allocation in check by rebalancing every time you invest. M1 Finance also offers “smart transfers,” which allows you to create “if this, then that” rules to transfer and invest your money automatically. For example, you could set a rule that says: “Invest all extra funds when my account balance reaches $1,000.”

M1 Finance is free for most users, but there are a few features that require upgrading to an M1 Plus membership, which costs $125 annually. These features include:

• Smart transfers
• Kids’ custodial accounts
• Additional trading windows
• Lower fees on margin loans
• A higher interest rate for the checking account

M1 Finance is for DIY investors, as they don’t make investment decisions for you, and don’t give you access to financial advisors to help you invest. But if you are someone who wants to automate your investments, but have the freedom to pick and choose what you’d like to invest in, M1 Finance could be a good option.

Pros

• No commissions on stock and ETF trading
• Access to thousands of investment choices
• Copy the investment pie of experts or other users

Cons

• Some features are locked behind “M1 Plus” membership, which is $125/year
• Not a managed service
• No access to human advisors

Open an account with M1 or read our full M1 review.

Empower: Best robo-advisor for high-net-worth individuals

Management fees: 0.49% to 0.89%
Account minimum: $100,000
Promotions: N/A

Empower is best known as a free investment tracker and analysis tool, allowing you to link up your financial accounts and see how your investments are performing. In addition to the free tools, Empower is a high-end advisory firm, offering customized investment plans for high-net-worth individuals at a fair price.

Empower’s wealth management services are available once you have $100,000 or more to invest, and come with unlimited access to licensed financial advisors, a full financial plan, and access to all of Empower’s online tools to track your investments. While management fees start at 0.89% annually, the fees can be as low as 0.49% if you have over $10 million invested.

Pros

• Access to free financial planning tools
• Access to licensed financial advisors
• Holistic, customized financial planning

Cons

• Only available if investing over $100,000
• Management fees are higher than most robo-advisors

(Personal Capital is now Empower)

Learn more about Empower or read our full Empower review.

How I chose these robo-advisors

I reviewed nearly two-dozen robo-advisor services, and filtered out those that were too costly, or that didn’t offer competitive features and services. I picked robo-advisors that appeal to different types of investors to give a wide variety of choices. All robo-advisors on this list offer low-cost ETFs, and are registered with FINRA, keeping them compliant with investment laws in the U.S.

What is a robo-advisor?

A robo-advisor is an automated investing service that helps you choose investments based on your risk tolerance, investing goals, and investing timelines. Robo-advisors do not rely on human interaction, and make investment decisions based on advanced algorithms and pre-selected portfolios.

Robo-advisors typically invest in low-cost ETFs, offering investment diversification while keeping the fees to a minimum. Robo-advisors also manage your investment for you, meaning that portfolios are automatically rebalanced on a regular basis, and some offer tax-loss harvesting to reduce your capital gains tax liability.

Read more: Capital gains and losses explained

How does a robo-advisor work?

Robo-advisors typically onboard new users by asking a series of questions about your money, your life, and your personality, which helps them gauge your risk tolerance and select the right types of investments for you.

You are then presented with an investment mix of ETFs that comprise your portfolio, and you can adjust this by choosing a more “aggressive” or “conservative” investment approach. Once the portfolio is selected and your account is funded, the robo-advisor keeps your portfolio in balance (by rebalancing), and invests new funds according to your asset allocation.

Robo-advisors are driven by algorithms and pre-defined parameters that help determine how to invest for a wide range of users.

Summary

Robo-advisors make investing easier, and there are quite a few robo-advisor services to choose from today. If you want to invest like a pro, but without paying the hefty annual fees of a financial advisor, a robo-advisor may be a good option for you.

Choosing the right robo-advisor means thinking about your investing goals, what features you absolutely need, and how “hands-off” you want to be. And don’t forget to consider the fees, as they can take a considerable chunk out of your investment earnings over time.

Featured image: Shutterstock.com/ Indypendenz

Read more:

• Are robo-advisors worth it?
• Robo-advisors vs. human financial advisors: Which is right for you?