Before robo-advisors, investing money in the stock market was often reserved for the wealthy — or rather those with large sums of money to invest and hire an advisor who could guide them.
Thanks to the emergence of robo-advisors — essentially software that uses algorithms and data to invest on your behalf — you don't need much money, time or knowledge to get started. Robo-advisors offer a hands-off approach for all sorts of investors, whether you're just starting out or an experienced investor who wants to put your investments on autopilot.
To determine the top robo-advisors on the market, CNBC Select analyzed over 20 different automated investing services. Those that made our list offer diversification, regularly rebalance your portfolio and help you plan out your investment goals to build wealth without spending a fortune. (See our methodology for more information on how we chose the best robo-advisors.)
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Best for beginners
Betterment
Minimum deposit and balance
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. For example, Betterment doesn't require clients to maintain a minimum investment account balance, but there is a ACH deposit minimum of $10. Premium Investing requires a $100,000 minimum balance.
Fees
Fees may vary depending on the investment vehicle selected, account balances, etc. Click here for details.
Investment vehicles
Robo-advisor: Betterment Digital Investing IRA: Betterment Traditional, Roth and SEP IRAs 401(k): Betterment 401(k) for employers
Investment options
Stocks, bonds, ETFs and cash
Educational resources
Betterment offers retirement and other education materials
Terms apply. Does not apply to crypto asset portfolios.
Pros
- No trade or transfer fees
- Good for automated investing
- Customizes users' portfolios around their financial goals, timeline and risk tolerance
- Users can assign specific investing goals (short- and long-term) to each portfolio and invest using different strategies (less and more risk)
- Quick and easy to set up account
- Able to sync external retirement accounts to your Betterment retirement goal so all your accounts are in one place. Premium plan users get unlimited access to a financial advisor (otherwise, one-time advisor consultations cost a fee ranging from $299 to $399)
- Advanced features include automatic rebalancing, tax-saving strategies and socially responsible investing
Cons
- Base price for investing accounts is $4/month - recurring monthly deposits totaling $250, or total Betterment account balances reaching $20,000, automatically switch you to an annual price of .25% of your investing account balances
- Premium plan requires $100,000 minimum balance
Who's this for? Betterment was one of the first robo-advisors to hit the market in 2008 and it has stood out as the best for beginner investors ever since. There's no minimum balance required, Betterment's algorithms automatically adjust and rebalance portfolios, users can easily track their investments, plus they have access to tax tools like tax-loss harvesting (the robo-advisor will automatically sell holdings experiencing a loss to help offset taxes so you only pay taxes on your net profit), as well as a "tax impact preview" tool that lets investors see how much they might have to pay in taxes before withdrawing funds.
Best for parents
Wealthfront
Minimum deposit and balance
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. $500 minimum deposit for investment accounts
Fees
Fees may vary depending on the investment vehicle selected. Zero account, transfer, trading or commission fees (fund ratios may apply). Wealthfront annual management advisory fee is 0.25% of your account balance
Bonus
Get $50 bonus when you fund your first taxable investment account
Investment vehicles
Investment options
Stocks, bonds, ETFs and cash. Additional asset classes to your portfolio include real estate, natural resources and dividend stocks
Educational resources
Offers free financial advice for college planning, retirement and homebuying
Terms apply.
Pros
- No trade or transfer fees
- Good for automated investing
- Picks investments based on user's risk tolerance and time until retirement
- Offers a cash management checking account with a debit card
- Tax-loss harvesting to reduce the taxes you pay:
- Fund your first taxable Investment Account and get a $50 bonus.
Cons
- $500 minimum deposit
- 0.25% management fee
Who's this for? Wealthfront was another early player in the robo-advisor scene. It shares many of the same features as Betterment, including a low 0.25% annual advisory fee and tax-loss harvesting. It stands out for parents because it's the only robo-advisor on this list that offers its own 529 college savings plan, the Wealthfront 529 sponsored by the state of Nevada. The 529 is available to everyone, no matter your state of residency.
Best for high net worth
Charles Schwab
Minimum deposit and balance
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No account minimum for active investing through Schwab One® Brokerage Account. Automated investing through Schwab Intelligent Portfolios® requires a $5,000 minimum deposit
Fees
Fees may vary depending on the investment vehicle selected. Schwab One® Brokerage Account has no account fees, $0 commission fees for stock and ETF trades, $0 transaction fees for over 4,000 mutual funds and a $0.65 fee per options contract
Bonus
None
Investment vehicles
Robo-advisor: Schwab Intelligent Portfolios® and Schwab Intelligent Portfolios Premium™ IRA: Charles Schwab Traditional, Roth, Rollover, Inherited and Custodial IRAs; plus, a Personal Choice Retirement Account® (PCRA) Brokerage and trading: Schwab One® Brokerage Account, Brokerage Account + Specialized Platforms and Support for Trading, Schwab Global Account™ and Schwab Organization Account
Investment options
Stocks, bonds, mutual funds, CDs and ETFs
Educational resources
Extensive retirement planning tools
Terms apply.
Pros
- $0 minimum deposit for active investing
- No commission fees for stock and ETF trades and no transaction fees for over 4,000 mutual funds
- Offers extensive retirement planning tools
- Users can get on-demand advice from a professional advisor/Schwab expert
- Robo-advisor Schwab Intelligent Portfolios® available as a no-fee automated service option (with Premium version available for a fee)
- Trading platform StreetSmart Edge® available for more active investors
- 24/7 customer support access by phone or chat
- Charles Schwab offers over 300 brick-and-mortar branches across the U.S. for in-person support
Cons
- Specific transactions may require commission fee
- Robo-advisor Schwab Intelligent Portfolios Premium charges a one-time planning fee of $300, then a $30 per month advisory fee. For that price, you get unlimited 1:1 guidance from a CFP, interactive planning tools, plus a personalized roadmap for reaching your goals
Who's this for? Charles Schwab's automated investing service Schwab Intelligent Portfolios® is ideal for high-net-worth investors because it requires a $5,000 minimum deposit to open an account — one of the highest we've seen for basic automated investing — and because Schwab has more than 300 brick-and-mortar branches across the U.S. for in-person banking needs.
Best for women
Ellevest
Minimum deposit and balance
No minimum deposit to start investing and no minimum account balance for Ellevest Membership advisory service; however, there are portfolio-specific minimums (ranging from $1 to approximately $240)
Fees
Fees may vary depending on the investment vehicle selected. Ellevest Essential membership costs $1/month (or $12/year), Ellevest Plus costs $5/month (or $54/year) and Ellevest Executive costs $9/month (or $97/year); fund fees range from 0.05% to 0.10% across all Ellevest Core Portfolios and 0.13% to 0.19% across all Ellevest Impact Portfolios
Bonus
None
Investment vehicles
Robo-advisor: Ellevest robo-advisor IRA: Ellevest Traditional, Roth, SEP and Rollover IRAs
Investment options
Stocks, bonds, ETFs, ESG, mutual, alternative and impact funds
Educational resources
Online workshops, email courses and video resources
Terms apply.
Pros
- Investment algorithm factors in important realities of women’s lives, such as pay gaps, career breaks and longer life expectancy
- Unlimited access to online workshops, email courses and video resources from Ellevest team of financial planners and career coaches
- 1:1 sessions (starting at $38) with Ellevest financial planners and career coaches at a discount (20% discount for Essential members, 30% for Plus and 50% for Executive)
- Offers private wealth management for high and ultra high net worth individuals, families and institutions (investments of $1 million or more)
Cons
- Ellevest requires membership cost ranging from $1/month to $9/month
- 0.05% to 0.19% fund fees
Who's this for? Ellevest has become a leader in the personal finance space for women because its algorithm considers important realities of women's lives, such as pay gaps, career breaks and longer life expectancy, so women can get a true sense of where they stand financially. Ellevest also provides women investors access to online workshops, email courses and video resources from its team of financial planners and career coaches.
Best for extra perks
SoFi Invest®
Minimum deposit and balance
Minimum deposit and balance requirements may vary depending on the investment vehicle selected. No account minimum for active or automated investing, or to participate in IPOs. $5 minimum to own a fractional share of a company.
Fees
Fees may vary depending on the investment vehicle selected. Active investing has zero commission fees for trading stocks and ETFs (exchange and fund management fees may apply). Automated investing has zero management fees
Bonus
Download the SoFi app and get up to $1,000 when you open an Active SoFi Invest® Brokerage Account. SoFi covers up to $75 of any transfer fees your brokerage may charge when you transfer an account to SoFi
Investment vehicles
Robo-advisor: SoFi Automated Investing IRA: SoFi Traditional, Roth, SEP and Rollover IRAs Brokerage and trading: SoFi Active Investing
Investment options
Stocks, bonds, ETFs, fractional shares and IPO participation
Educational resources
Investors can create a personal watchlist that follows their stocks to stay up to date and receive the latest investing news
Terms apply.
Pros
- $0 minimum deposit for active, automated investing and IPO participation
- Ability to purchase fractional shares and participate in IPOs before traded on public market
- No commission fees for trading stocks and ETFs
- No management fees for automated investing
- Variety of bonuses being offered
- SoFi members get access to rate discounts on other SoFi products and access to exclusive events and experiences, as well as career services and access to financial advisors
Cons
- Minimums required for fractional shares ($5)
- Exchange and fund management fees may apply with active investing
Who's this for? SoFi Invest stands out for the benefits it offers members, like rate discounts on other SoFi financial products, access to exclusive events and one-on-one time with financial advisors for no extra cost.
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More on our top robo-advisors
Betterment
Cost
$4 per month for automated investing, with no minimum deposit or balance requirements. Investors will automatically switch to paying an annual account fee of 0.25% of their fund balance when making monthly deposits or transfers of at least $250 or when reaching a minimum $20,000 balance across all Betterment accounts.
For a 0.15% add-on fee, investors can upgrade to Betterment Premium and get unlimited, one-on-one access to a CFP®. A $100,000 minimum balance in cash, stocks, bonds or crypto holdings is required for Betterment Premium and theres a 0.40% annual fee.
Investment accounts offered
Robo-advisor, IRAs and 401(k) rollovers
Wealthfront
Cost
$500 minimum deposit for automated investing and 0.25% annual advisory fee
Investment accounts offered
Robo-advisor, IRAs and rollovers, 529 plan
Charles Schwab
Cost
$5,000 minimum deposit to open automated investing account
Investors can upgrade to Schwab Intelligent Portfolios Premium® and get unlimited one-on-one guidance from a CFP for a one-time planning fee of $300, then a $30 per month advisory fee after that. There's a $25,000 minimum.
Investment accounts offered
Brokerage and trading, robo-advisor, IRAs and rollovers, 529 plan, custodial investing account, education savings account, personal choice retirement account, small business retirement plans and trading, Schwab Charitable™ account, Schwab One® trust account, Schwab One® estate account
Ellevest
Cost
$12 per month for automated investing, with no minimum deposit or balance requirements. Investors get up to five goal-specific accounts and portfolios, retirement planning, tax minimization and automatic rebalancing, workshops and email courses, plus up to a 50% discount on one-on-one financial planning sessions with an Ellevest CFP.
Ellevest Private Wealth Management is available for those with $1 million or more to invest. Ellevest requires a minimum $250,000 for a sub-advised account.
Investment accounts offered
Robo-advisor, IRAs and 401(k) rollovers
SoFi Invest
Cost
$1 to start automated investing
Investment accounts offered
Brokerage and trading, robo-advisor, IRAs and rollovers
What is a robo-advisor?
A robo-advisor is a software platform that uses algorithms to create an investment portfolio for you. The best robo-advisors aim to maximize your return potential according to your risk tolerance. Robo-advisors will automatically adjust your investments regularly, also known as rebalancing, so you don't have to.
How does a robo-advisor work?
When you open an account with a robo-advisor, you will start by answering general questions such as your age, investment goals, investment time horizon and overall risk tolerance, or how much risk you are willing to take on.
You'll then deposit some money, and the robo-advisor will invest it in diversified portfolios of stocks and bonds that match your risk tolerance. For example, investors with aggressive risk tolerance may see a greater percentage of stock ETFs in their portfolio while those with more conservative risk tolerance are likely to see a greater percentage of bond ETFs in their portfolio.
To get the most out of your robo-advisor account, it's smart to contribute every month (similar to your 401(k)), which will help your investment grow in the long term.
Pros and cons of robo-advisors
Like with other investment vehicles, there are some advantages and disadvantages to consider with robo-advisors. Here are their pros and cons.
Pros of robo-advisors
- Low cost
- No investing expertise required
- Easy to set up
- Automatically rebalance for you
- Take into account your goals, risk tolerance, time horizon, etc.
Cons of robo-advisors
- Essentially working with a robot so not as personalized as working with a real-life advisor
- Access to real-life advisors may require additional costs or minimums to meet
- Limited in what you can invest in
FAQs
Which robo-advisor has the best returns?
All robo-advisor returns fluctuate with the market, so there isn't one service that outperforms another.
Do any robo-advisors beat the market?
Robo-advisors are set up to mainly meet the market's performance so you shouldn't invest in a robo-advisor expecting to beat the market. Many automated investing services will put an investor's money in index funds that track the S&P 500.
Is it worth paying for a robo-advisor?
It can be worth paying for a robo-advisor, especially compared to other investment options since their management advisory fees are much more affordable than if you signed up with a traditional financial advisor. A robo-advisor's advisory fee, which often ranges from 0.25% to 0.50%, is expressed as a percentage of your account balance on an annual basis. For example, a 0.25% management fee on a $10,000 annual balance would only be $25 — pretty affordable.
Which bank has the best robo-advisor?
The brokerages on this list offer the best robo-advisor options:
What is the average return on a robo-advisor?
According to Vanguard, five-year returns from most robo-advisors generally range from 2% to 5% annually.
Can you trust robo-advisors?
You can trust robo-advisors as much as you can a human financial advisor. Robo-advisors are fiduciaries, which means they are legally obligated to put an investor's interests first.
Should I use a robo-advisor or do it myself?
Deciding between using a robo-advisor or investing on your own depends on your level of comfort as an investor. Robo-advisors make a great choice for beginners looking to dip their toe into the investing pool since they don't require you to know much about the stock market. Newbie investors can consider a robo-advisor that doesn't have a minimum opening deposit so they can start small to see if they like automated investing.
Experienced investors shouldn't totally discount robo-advisors, however, as they can be helpful to those who don't have the time to manage their portfolio and/or want a low-cost investing solution. With a robo-advisor, your investments are put on autopilot, working on your behalf, and you can check them whenever work for your schedule.
Which robo-advisors do tax-loss harvesting?
Most robo-advisors these days offer tax-loss harvesting services, including those on this list.
Bottom line
A robo-advisor can be a good entryway into investing or it can offer a low-cost option for investors looking for something more affordable. Start with the automated investing options on this list.
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Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every robo-advisor review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of investing products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best robo-advisors.
Our methodology
To determine which robo-advisors offer the best services for investors, CNBC Select reviewed 22 different platforms. We then narrowed down our top picks by considering the following factors:
- Account minimums
- Account, advisory, trading and fund fees
- Selection of investments
- Other investment vehicles offered
- Tax tools
- Access to human financial advisors
- User perks
- Educational tools and resources
- Customer support
After reviewing the above features, we based our recommendations on platforms offering the lowest fees, the widest range of investment options, usability and any unique features like access to a human advisor. We also looked into each company's customer support structure and app reviews.
We sorted our top picks by best for beginners, best for parents, best for high net worth, best for women and best for extra perks.
Your investment earnings through a robo-advisor are subject to fluctuations of the market. Your earnings also depend on any associated fees and the contributions you make to your account. There are no guarantees that you'll earn a certain rate of return or that current investment options will always be available. To determine the best approach for your specific investment goals, speaking with a reputable fiduciary investment advisor is recommended.
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