The Best Robo Financial Advisors of 2023
Robo-advisors can offer an effective way for you to grow your investments without needing to have an active hand in your portfolio or take on too much risk. They can also be cheaper than a traditional advisor. The type of advisor or strategy that makes sense for you will depend on your personal situation along with your financial goals.
- Written By Christian Simmons
Christian Simmons is a financial writer who has worked professionally as a journalist since 2016. As an active member of the Association for Financial Counseling & Planning (AFCPE), Christian prides himself on his ability to break down complex financial topics in ways that Annuity.org readers can easily understand.Read More
- Edited ByLamia Chowdhury
Lamia Chowdhury is a financial editor at Annuity.org. Lamia carries an extensive skillset in the content marketing field, and her work as a copywriter spans industries as diverse as finance, health care, travel and restaurants.Read More
- Financially Reviewed ByTimothy Li, MBA
Timothy Li, MBA
Business Finance Manager
Timothy Li, MBA, has dedicated his career to increasing profitability for his clients, including Fortune 500 companies. Timothy currently serves as a business finance manager where he researches ways to increase profitability within the supply chain, logistics and sales departments.Read More
- Updated: June 1, 2023
- 5 min read time
- This page features 9 Cited Research ArticlesOur Criteria
To be considered for this list, robo-advisor companies needed to meet Annuity.org’s set criteria:
Understanding Our Methodology
Annuity.org’s independent editorial team developed a strict and industry-specific methodology to help ensure that only the most effective robo financial advisors were considered.
To ensure all consumers have access, services were only considered if they were nationally available and easily accessible.
Each robo-advisor also needed to have assets under management of $500 million or more to warrant consideration. This helped ensure that all the companies evaluated had a wide reach, were financially secure and have a proven track record of serving consumers.
Since some robo-advisors are essentially products offered by larger companies, it can be difficult to standardize customer satisfaction ratings across different services. For this reason, both the Better Business Bureau grade of the company (where applicable) and the App Store rating for the corresponding apps rated by consumers were employed to measure the customer satisfaction and standing of each robo-advisor.
Other factors that were heavily considered by our team included affordability, variety of services offered, accessibility and transparency.Robo advisors are a good option for beginners in investing and those that want to avoid high management fees. Keep in mind the possible drawbacks, which include limited investment choices and limited human involvement.
Editor’s Choice: Best Overall Robo Financial Advisor of 2023GREAT FOR: HISTORY OF STRONG RETURNS
While much younger than some legacy investment companies, Wealthfront has firmly established itself as one of the key players in the robo-advisor space thanks to consistently strong returns over a decade-plus of operation.Pros & ConsPros
- Adaptable to your risk level
- Tax-loss harvesting and direct indexing offered
- Low annual fee
- Requires account minimums
- Not as easy to navigate as some competitors
Thanks to a strong proven track record of success, diversity of services offered and user simplicity, Wealthfront is our pick for the best overall robo financial advisor of 2023. Wealthfront offers intuitive automated investing that can be easily curated to match both the goals and risk level of the client.
Wealthfront’s annual fee for its automated investing service is 0.25%, which matches up well with the rest of the industry, and customers have seen strong results for years.
According to the company’s website, portfolios with the most selected risk score have grown by 6.64% since 2011. Tax-loss harvesting has also resulted in an average boost of 1.8% on after-tax returns.
Wealthfront offers a hands-off way for customers to select their goals, pinpoint their risk tolerance and have a good chance at seeing real returns.
Best Low-Cost Robo Financial AdvisorGREAT FOR: LOW COST
SoFi has established itself in the robo-advisor space with its automated investing, one of the cheapest options available.Pros & ConsPros
- No attached fee
- Access to SoFi member benefits included
- No tax-loss harvesting
- Somewhat simpler than more robust competitors
When cost is king in your search for a robo-advisor, it’s hard to beat SoFi Automated Investing. The company’s robo-advisor service comes with no fees attached, as well as no required minimum investment.
And that low cost is paired with a strong service. SoFi Automated Investing is a goal-oriented platform, advertising itself as a way to save money or grow investments towards specific goals such as buying a home or planning for a wedding. Customers also gain access to SoFi’s member benefits by signing up.
While the lack of fees is naturally attractive, the trade off is that the service is not quite as robust as some other competitors. It also does not offer tax-loss harvesting capabilities.
Best Robo Financial Advisor for Customer SatisfactionGREAT FOR: CUSTOMER SATISFACTION
Founded in just 2015, M1 Finance is one of the newer players in the robo-advisor space but has already established itself as a strong and customer-friendly option.Pros & ConsPros
- Dynamic rebalancing offered
- Low cost
- Strong BBB and App Store rating
- No tax-loss harvesting
While many of the robo-advisor options listed have strong customer satisfaction, M1 Finance stands out in this category. The company has an A- rating with the Better Business Bureau (higher than Wealthfront or Betterment) and also boasts a 4.7/5 rating with 52,000 reviews on the App Store.
M1 Finance’s automatic investing allows both manual and dynamic rebalancing, giving users the hands-off freedom that comes with automation while allowing control over the movement of their portfolio. Investments are grouped into “pies,” which make up a portfolio and can be devised directly by the user.
Depending on how hands-on you are in creating and grouping your pies, M1 Finance can potentially require more heavy lifting by the customer than some other competitors. Tax-loss harvesting is also not offered.
Best Robo Financial Advisor for BeginnersGREAT FOR: BEGINNERS
With an AUM of $34 billion and nearly 800,000 clients, according to the company’s website, Betterment is one of the strongest forces in the robo-advisor space. Its website transparency and ease of access make it a strong option for beginners.Pros & ConsPros
- Generally low fees
- Tax loss harvesting and other tax benefits offered
- Easy to use and transparent interface
- High barrier to entry for premium offerings
Betterment is an excellent option for those who are just wading in to the robo-advisor space and are looking for an easy-to-understand option. The company’s website is simple to navigate, and it isn’t difficult to get started.
It also includes helpful gadgets, such as a life goals quiz to help funnel customers towards the service or strategy that makes the most sense for them.
On top of its simplicity and easy path to get started, Betterment includes many of the robust benefits offered by other robo-advisors, including tax-loss harvesting and coordination, and automatic portfolio adjustments.
One of the few drawbacks, which may be less of a concern for beginners, is the high barrier to entry for premium clients. While its regular service includes a $4 monthly fee (or 0.25% annually if your account exceeds $20,000), its premium service requires a balance of at least $100,000.
Best Robo Financial Advisor for WomenGREAT FOR: WOMEN INVESTORS
One of the most unique offerings in the robo-advisor space is Ellevest, which is both curated specifically towards women and offers impact investing.Pros & ConsPros
- Woman-focused lens
- Impact investing
- Reasonable pricing
- No tax-loss harvesting
- Niche audience
For women looking to invest in a robo-advisor catered specifically to their needs, Ellevest is a strong option. The company advertises itself as offering a womens-first approach to investing. Women make less money on average than men and live longer. Ellevest’s service takes concerns like that into account.
While Ellevest offers many of the same benefits as other robo-advisors, it also includes additional options such as the impact portfolio, which allows half of the customer’s portfolio to be invested in ETFs and mutual funds that help advance women.
Ellevest is generally affordable as well, with $5 per month and $9 per month options available, along with no minimum required balance.
Other Robo Financial Advisors We Considered
- Fidelity Go: The service was considered due to meeting the methodology requirements but was ultimately not selected in part due to its 0.35% advisory fee on accounts of $25,000 or more, which was higher than some competitors.
- Schwab Intelligent Portfolios: The service was considered due to meeting the methodology requirements but was not selected in part due to its $5,000 minimum account requirement, which was notably higher than some competitors.
- Vanguard Digital Advisor: The service was considered due to meeting the methodology requirements but was ultimately not selected in part due to its $3,000 minimum amount requirement, which was notably higher than some competitors.
Working with a Robo Financial Advisor
Working with a robo financial advisor can be a lot different than working with a traditional financial advisor.
When you opt to go the traditional route, you often meet with the advisor for multiple consultations, have discussions about your financial goals and build out a portfolio or investment plan from there.
Opting for a robo-advisor is a more straightforward and ready-made option.
When you sign up for a robo-advisor, you typically input information or fill out a questionnaire about your financial status and current assets. That information is then inputted into a program that crafts an investment portfolio for you.
The robo-advisor will then manage that portfolio and make investments for you, typically within the parameters of your choosing.
Robo-advisors can be an excellent option for people who want to get into investing or establish a portfolio but are not looking for the heavy-duty and drawn-out process of working with a traditional financial advisor.
According to the U.S. Securities and Exchange Commission, robo-advisors can also often offer cheaper services than traditional advisors. Robo-advisors can help make financial advice and information that was once reserved for high net worth individuals available to the general public.
Selecting the Right Robo Financial Advisor for You
Not all robo-advisors make sense for everyone. In fact, a robo-advisor may not make sense for you at all. If you are looking to invest a significant sum of money or have very specific investment goals or a unique situation, then opting for a traditional financial advisor where you will receive more specialized service may make more sense.What To Consider When Selecting a Robo-Advisor
- Whether you should opt for a traditional advisor
- Cost and how cost is calculated
- Services offered
- Customer satisfaction
When identifying the robo-advisor that makes the most sense for you, understanding how much you are willing to spend can be a good starting point to narrowing down your options.
How that cost is calculated will likely also play a role. Some services charge a flat monthly or annual fee, while others charge based on a percentage of the money earned or invested.
Comparing services may also make sense. Not all robo-advisors offer the same options or invest your money in the same way. Comparing service offerings to find the option that best matches with your financial situation and goals can help you land on a good fit.
Reviewing customer satisfaction for providers can be beneficial as well. Many robo-advisors have publicly available reviews, whether through the Better Business Bureau or through app store customer reviews.
Frequently Asked Questions About Robo Financial AdvisorsCan high net worth individuals use robo-advisors?High net worth individuals can make use of robo-advisors. However, they may be able to get more specialized service that is more attuned to their specific investment needs from regular financial advisors.How are robo financial advisors different from regular financial advisors?A robo financial advisor offers a more ready-made and fast approach to investing than a regular financial advisor, since it often involves placing your data into a system to pinpoint the best investments for you. Regular financial advisors may make sense for more specialized needs.How much do robo financial advisors typically cost?The cost of a robo-advisor (and how that cost is calculated) can vary heavily from provider to provider. Some can cost as little as a few dollars per month.Advertisement
Connect With a Financial Advisor Instantly
Our free tool can help you find an advisor who serves your needs. Get matched with a financial advisor who fits your unique criteria. Once you’ve been matched, consult for free with no obligation.Please seek the advice of a qualified professional before making financial decisions.Last Modified: June 1, 2023Share This Page:
9 Cited Research Articles
Annuity.org writers adhere to strict sourcing guidelines and use only credible sources of information, including authoritative financial publications, academic organizations, peer-reviewed journals, highly regarded nonprofit organizations, government reports, court records and interviews with qualified experts. You can read more about our commitment to accuracy, fairness and transparency in our editorial guidelines.
- The Robo Report. (2022, March 31). AUM Statistics. Retrieved from https://www.theroboreport.com/data/aum-statistics/
- U.S. Securities and Exchange Commission. (2017, February 23). Investor Bulletin: Robo-Advisers. Retrieved from https://www.sec.gov/oiea/investor-alerts-bulletins/ib_robo-advisers
- Better Business Bureau. (n.d.). M1. Retrieved from https://www.bbb.org/us/il/chicago/profile/consumer-finance-companies/m1-0654-90005370
- Betterment. (n.d.). Built To Make Investing Easy. Retrieved from https://www.betterment.com/investing
- Ellevest. (n.d.). The #1 Investing App for Women, Built by Women. Retrieved from https://www.ellevest.com/
- M1 Finance. (n.d.). Automated Investing Made Simple. Retrieved from https://m1.com/automated-investing/
- SoFi. (n.d.). Automated Investing. Retrieved from https://www.sofi.com/invest/automated/
- U.S. Securities and Exchange Commission. (n.d.). Robo-Adviser. Retrieved from https://www.investor.gov/introduction-investing/investing-basics/glossary/robo-adviser
- Wealthfront. (n.d.). Wealthfront. Retrieved from https://www.wealthfront.com/investing
- Edited By
Your web browser is no longer supported by Microsoft. Update your browser for more security, speed and compatibility.
If you are interested in learning more about buying or selling annuities, call us at 866-528-4784