One of the newest entries into the investing world, robo-advisors have become ubiquitous among both new advisors and experienced personal portfolio managers. Claiming to harness the power of artificial intelligence to create smart investment plans, the trend offers a safe place to help money grow for the uninitiated and an easy option for those with large amounts of cash to trade.

Does it make sense to invest in a robo-advisor? More importantly, can an AI-powered portfolio help grow your funds in a sustainable and measured way? As with everything on the stock market, it all comes down to your comfort in algorithms and how much risk you are willing to take on with your finances.

What Is a Robo-Advisor?

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In short, robo-advisors are computer programs that act like traditional financial planners in that they help investors balance their portfolio for growth. Once programmed, they provide financial guidance based on their algorithms, determining how conservative or aggressive the portfolio should be. Because robo-advisors require little human intervention and can manage all directions online, robo-advisors usually cost less than a human financial advisor.

How Do Robo-Advisors Assess Financials?

When starting in robo investing, the robo-advisor will ask the account holder a set of questions to determine their risk tolerance. Based on those answers, the robo-advisor will adjust the portfolio to reflect a conservative stance, an aggressive plan or anywhere in between. If there is a change in the market, the robot’s programming will ultimately determine which changes to make to reach the stated goal. During times of considerable market volatility (like investing during the Coronavirus crisis), robo-advisors take the emotions out of investing and plan based on their programming and market trends.

How Does a Robo-Advisor Decide How to Allocate Your Investments?

Unlike traditional financial advisors, which can pick between any choice of securities, robo-advisors are often limited to a series of exchange-traded funds (ETFs) or mutual funds, offering exposure to various sectors of the market. Once the account management questionnaire is complete, the robo-advisor will determine which funds it should invest in to get the best possible return. As the investor’s goals change, the investment plan can be adjusted to optimize towards those goals.

How Much Do Robo-Advisors Cost?

According to a study by Deloitte, robo-advisors can be much friendlier to investors on a budget than traditional financial advisors. Clients who trust their funds to a robo advisor pay anywhere between 0.02–1% of their assets under management in fees. Comparatively, a human advisor often charges 2–3% of the investor’s assets under management.

While that might not sound like much, a robo-advisor managing $50,000 with a fee of 0.5% would charge $250 in fees. In comparison, a human advisor managing that same amount with a 2.5% fee charges $1,250.

Should Retirees Use Robo-Advisors?

When considering managing money in your golden years, robo-advisors may be able to help retirees maximize their nest egg through smart investing. Because robo-advisors cost less and have limited exposure to funds, their investing profiles can help retirees maximize growth as they draw from their retirement savings. But before placing money in any robo-advisor, be sure to read information on the robo-advisor and their portfolio funds to ensure it is a safe move.

Can Robo-Advisors Replace Human Financial Advisers?

Robo-advisors can do a lot to help investors start saving and investing toward their goals. But for high-wealth individuals, the limited access to ETFs and concrete rules may limit how they can build their wealth. For those who have significant amounts of funds to trade, it may still be advisable to work with a human financial advisor.

Popular Robo-Advisors Available Today

An investor examines data provided by his robo-advisor.
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It seems that there’s no shortage of robo-advisor platforms, each offering their own approach to AI-driven investing and advising. If you’re thinking of robo investing, is there one platform that’s better than others? Which one is right for your wealth-building goals?

Not all robo-advisors are the same, and there’s no one-size-fits-all plan. To help you determine which platform is right for you, MoneyGeek did the research to help you learn the pros and cons of each robo-advising platform.


  • Account Minimum: $0
  • Fee: $1 per month for Lite, $3 per month for Personal and $5 per month for Family
  • Best for: New investors who want all of their funds automatically deposited and managed
  • Features: Manage your checking, investing and retirement accounts all in one place, making investing simple. Acorns provides five basic investing profiles, ranging from conservative to aggressive portfolios, to help investors manage growth.
  • Rebalancing: Yes
  • Tax-Loss Harvesting: No

One of the easiest platforms for robo investing, Acorns lets users “round up” the change from their everyday spending into an investment or retirement account. With a combined platform for banking and investing, Acorns takes the frustration out of long-term savings while helping new investors understand how they build wealth.


  • Account Minimum: $0 for Digital, $100,000 for Premium
  • Fee: 0.25% annually of assets under management for Digital, 0.40% annually of assets under management for Premium
  • Best for: Investors who want the best of both worlds: a robo-advisor for day-to-day management, with access to financial planners when portfolios get bigger
  • Features: Checking accounts, traditional and self-employed retirement accounts, investment accounts with personalized advice from robo-advisors
  • Rebalancing: Yes
  • Tax-Loss Harvesting: Yes

One of the first robo investing platforms in the marketplace, Betterment offers a hybrid approach. While the robo-advisor has access to a globally balanced portfolio of ETFs, users can also schedule an appointment with a human advisor to develop a customized plan to reach their long-term goals at each decade of their lives.


  • Account Minimum: $0 (Blooom does not hold account money)
  • Fee: $45 per year for Essentials, $120 per year for Standard, $250 per year for Unlimited
  • Best for: Investors who already have established accounts but need help optimizing them
  • Features: Personalized portfolio plans based on investor goals, automatic trades by the robo-advisor based on market activity, access to a live financial advisor via chat or secure messaging
  • Rebalancing: Yes
  • Tax-Loss Harvesting: No

Whereas most robo investing platforms only use AI and algorithms, Blooom takes a hybrid approach to automated investment and retirement savings. This platform links to an account held at a brokerage firm and makes changes to optimize goals as necessary. Investors can also ask for help from a financial professional to make sure their plan is on the right track.


  • Account Minimum: $1 to $240, based on portfolio-specific minimums
  • Fee: $1 per month for Essential, $5 per month for Plus, $9 per month for Executive
  • Best for: Women who want personalized advice on building wealth
  • Features: Banking, investing and retirement accounts all in one place, access to workshops on building wealth, discounts for meeting with financial advisors and career coaches
  • Rebalancing: Yes, with account minimums
  • Tax-Loss Harvesting: No

Branded as the first robo investing platform “by women, for women,” Ellevest seeks to empower female investors with all the tools they need to build their wealth. In addition to offering banking, investing and retirement all in one place, Ellevest also offers users discounted sessions with career coaches and financial advisors, helping them build value in multiple ways.

Fidelity Go

  • Account Minimum: $10
  • Fee: $0 for balances under $10,000, $3 per month for balances between $10,000 and $49,999, 0.35% of assets under management per year for balances above $50,000
  • Best for: Investors building long-term investment income with one of the most trusted names in the industry
  • Features: Investments in mutual funds instead of ETFs, managed by a robo-advisor and the team behind Fidelity Go
  • Rebalancing: Yes
  • Tax-Loss Harvesting: No

Fidelity Go takes all the frustration out of investing through a fully managed, self-automated robo-advisor. Choosing from a set of Fidelity Flex mutual funds, the robo investing platform seeks to build tax-efficient, long-term wealth without the need for investor micro-management.

Schwab Intelligent Portfolio

  • Account Minimum: $5,000 for Intelligent Portfolio, $25,000 for Intelligent Portfolio Premium
  • Fee: $0 for Intelligent Portfolio one-time $300 planning fee and $30 per month for Intelligent Portfolio Premium
  • Best for: Higher-value investors who want the support of robo-advisors and financial planners
  • Features: Wider range of ETFs to invest in, interest on cash held in a Charles Schwab bank account
  • Rebalancing: Yes
  • Tax-Loss Harvesting: Yes, for accounts holding more than $25,000

For over 40 years, Charles Schwab is one of the biggest names in investing, and their robo investing platform certainly builds upon their reputation. Offering one of the broadest investing options with 53 hand-picked ETFs, those with extra money to invest can get started with a cost-efficient advisor built for long-term gains.

SoFi Automated Investing

  • Account Minimum: $1
  • Fee: $0
  • Best for: Tech-smart investors who want to watch their assets grow alongside their bank account
  • Features: Investing profiles based on personal goals, portfolio diversity in ETFs, stocks, bonds, mutual funds and international funds, access to rate discounts on other SoFi products
  • Rebalancing: Yes
  • Tax-Loss Harvesting: No

Known more for their suite of personal loan products, SoFi expanded over the years to include checking services and a robo-investing platform. Taking a diversified approach with ETFs that track major indexes, SoFi’s tech-savvy robo investing platform allows users to customize their investing approach, ranging from conservative to aggressive.

TD Ameritrade’s Essential Portfolio

  • Account Minimum: $500
  • Fee: 0.3% annually of assets under management
  • Best for: Investors looking for socially aware, ESG-investing options
  • Features: Professional portfolio management, non-proprietary ETF options, live help from portfolio specialists
  • Rebalancing: Yes
  • Tax-Loss Harvesting: Yes

What makes TD Ameritrade Essential Portfolios unique is their socially aware investing options. With their robo investing platform, investors with as little as $500 can dedicate part of their portfolio to funds with environmental, social and governing causes in mind. And with the help of experts, investors have all the tools they need to help their money grow.

Vanguard Digital Advisor

  • Account Minimum: $3,000
  • Fee: Between 0.15% and 0.20% annually of assets under management
  • Best for: Investors who want to build their retirement savings
  • Features: Emergency fund advising, idle cash management, debt payoff calculators
  • Rebalancing: Yes
  • Tax-Loss Harvesting: No

Built on the strength of one of the world’s most trusted advisory firms, Vanguard Digital Advisor is built for investors seeking to save towards retirement. Only offering access to four ETFs, the Vanguard robo-advisor helps build long-term wealth while managing emergency funds and helping idle cash grow more efficiently along the way.


  • Account Minimum: $500
  • Fee: 0.25% annually of assets under management
  • Best for: Tech-smart investors who want to save toward a goal for five years or more.
  • Features: Banking and robo-investing in one place, wide variety of investment options for the robo-advisor
  • Rebalancing: Yes
  • Tax-Loss Harvesting: Yes

Saving for a long-term goal, like retirement or education costs, can be difficult. With their robo investing option, investors can place money in a Wealthfront savings account and investment account and build upon their financial goals. Their award-winning platform starts with a low account minimum and guides investors to their best options to save over five years or more.


  • Account Minimum: $0
  • Fee: 0.5% annually of assets under management for accounts holding less than $100,000, 0.4% for accounts holding more than $100,000
  • Best for: Socially conscious investors who want long-term gains toward retirement or other life goals
  • Features: Socially responsible portfolios, Halal portfolios, multiple account types for all kinds of investors
  • Rebalancing: Yes
  • Tax-Loss Harvesting: Yes

Built around Nobel Prize-winning research on passive investing, Wealthsimple helps investors get rich slowly. Offering several account types, ranging from individual and joint investing accounts to retirement plans, this robo investing platform offers a wide variety of investing options, including socially responsible and Halal options, to appeal to investors of any size.

Factors to Consider When Choosing a Robo-Advisor

A man looks at investment data as he tries to decide which robo-advisor to invest in.
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In many ways, robo-advisors offer a cost-effective alternative for investors who want to jump into the stock markets but aren’t sure where to start. When selecting the right robo investing platform for your needs, there are three things to consider: price, market exposure and your growth goals.

Robo-advisors generally charge less than a financial advisor because they are less labor-intensive to manage. However, a robo-investor is also bound to rebalance based on their algorithm, which may not include the most current data. If you’re investing tens of thousands of dollars in the market, it may be worthwhile to compare with a human advisor to determine which one can drive better results for the price.

Next, consider the market exposure each robo investing platform offers. While some only offer access to a limited number of mutual funds and ETFs, others can create a portfolio from more than 50 different funds. In some situations, the risk that comes from an abundance of choices may not translate to consistent gains.

Finally, take a realistic look at your goals to determine which robo-advisor can help you achieve them. While some specialize in long-term savings and retirement plans, others simply help you build an emergency fund.

Is a Robo-Advisor Worth It?

A businessman draws a graph to show how much money he gained using a robo-advisor.
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For investors who are nervous about jumping into the market or don’t necessarily have a plan to build long-term wealth, robo-advisors offer a relatively safe option to get started on the market. By answering a few questions to determine a path forward, investors can get started on a journey that ultimately leads toward building wealth — not just creating savings.

However, there are several downsides investors need to consider as well. In addition to their fee structure, robo-advisors are bound by concrete rules while only investing in funds that may add their own management costs. Although automation can be a good way to start, robo investing is far from replacing a real financial advisor’s expertise.

As you go down this path, determine your goals and look carefully at how a robo-advisor can help you reach them. With the right set of automation rules and a savings goal, you can find the right robot to bring your plans to life.

About the Author

Joe Cortez is a writer for MoneyGeek and a financial journalist, focusing on banking, investing and credit products. His work has appeared on many leading websites, including Business Insider and NextAdvisor. Follow him on Twitter @joecortez.