Robo-advisors primarily differ in their complexity and their asset offerings, in addition to the primary differences in account minimums and cost. 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. 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. Stocks and private equity available.Ī robo-advisor is an investment platform that makes trades on an investor’s behalf using survey responses and algorithms. Tax-minimization strategies and tax-loss harvesting. Advisory clients can access a financial advisor. Socially responsible investing options.įree net worth tracking and retirement planning. Excellent customer service.īest for newer investors. Financial experts create and manage portfolios. Preferred Rewards help customers reduce fees. Superb goal planning tools and calculators. With advisor - 0.85% Discounts available for Bank of America Preferred Rewards participantsĮasy to navigate. Borrow and spend options.Ġ.45% annually, of assets under management, assessed monthly. $100 ($500 minimum for retirement accounts) M1 Finance Best Low Costs / Best Sophisticated Investors Interactive Advisors Best SRI / Best Portfolio ConstructionĠ.08-1.5% per year, depending on advisor and portfolio chosenĥ0+ portfolio options. Mobile app on par with desktop version.īetterment Best Beginners / Best Cash ManagementĠ.25% (annual) for investing plan or $4/month fee for balances under 20K, 0.40% (annual) for the premium planĬustomizable portfolios. Wealthfront Best Overall / Best Goal PlanningĠ.25% for most accounts, no trading commission or fees for withdrawals, minimums, or transfers. Next, we’ll look at side-by-side comparisons of the companies we reviewed so you can see where each platform shines through. We found that Wealthfront offers the best overall experience balancing these options. It’s also helpful to consider platforms that allow for external account aggregation if your investments are held at more than one institution so you will have aligned tax optimization, investment strategies, and goal tracking. While many platforms follow passive investment strategies attempting to match the overall growth of the market, offerings that provide additional customizations let you invest in a more dynamic, personal way. This was left out due to different portfolio risk levels and allocation strategies between robo-advisors. One significant factor that wasn’t part of our rating methodology was investment returns. When considering which of these platforms might be the right fit, keep in mind your personal preferences, goals, and needs. There are several strong robo-advisor offerings with strengths in different key areas to help manage your money.
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