Top-Rated Robo-Advisors for Investing

If you’re looking to grow your wealth without spending hours on investment research, then robo-advisors might just be the perfect solution for you. Imagine having an expert investor working for you—one that never sleeps, doesn’t charge a high hourly rate, and makes calculated decisions based on solid data. That’s essentially what a robo-advisor does. In this article, I’ll guide you through what robo-advisors are, why they’re so popular, and which ones are top-rated for your investment goals.

What Exactly Is a Robo-Advisor?

Before diving into the top robo-advisors, it’s helpful to understand what they are. Simply put, a robo-advisor is an online platform that uses algorithms and computer programs to help you invest your money in a personalized portfolio. With a robo-advisor, you don’t have to be an expert in finance or constantly check the market. Instead, you can rely on sophisticated algorithms to manage your investments with minimal human intervention.

The appeal lies in their accessibility and cost-effectiveness. While a traditional financial advisor might charge a percentage of your investments or even hourly fees, robo-advisors typically offer significantly lower fees, making investing accessible to almost anyone.

Why Use a Robo-Advisor for Investing?

So, why would you want to use a robo-advisor in the first place? Here are some reasons to consider:

Ease of Use: You don’t need to understand the complexities of the stock market. Robo-advisors automate the entire process.
Low Fees: Traditional financial advisors can be expensive. Robo-advisors, on the other hand, charge a fraction of the cost.
Diversification: Robo-advisors use a mix of stocks, bonds, and other investments, providing broad diversification to manage risk.
Accessibility: Most robo-advisors have low minimum investment requirements, which means anyone can start investing with just a few dollars.

With that said, let’s go over some of the top-rated robo-advisors for investing.

1. Betterment: The Beginner-Friendly Option

If you’re new to investing, Betterment is an excellent robo-advisor to start with. Betterment is simple, straightforward, and designed to cater to beginner investors as well as experienced ones. The platform offers features like tax-loss harvesting, automatic rebalancing, and goal-based planning.

What You’ll Love About Betterment:

Ease of Use: Betterment’s user interface is intuitive. It guides you through the process and makes investing as easy as opening a savings account.
Low Minimum Investment: There is no minimum balance required to start using Betterment. You can begin investing with as little or as much as you’re comfortable with.
Goal-Based Planning: Betterment helps you set goals, such as retirement or building an emergency fund, and tailors your investments to help you reach those targets.

If you’re the type of person who wants a hands-off, easy-to-use platform that helps you get started with investing without a lot of fuss, Betterment could be perfect for you.

2. Wealthfront: Comprehensive and Low-Cost

Wealthfront is another well-known robo-advisor that offers a wide variety of features. Unlike some of the simpler platforms, Wealthfront provides a full range of financial planning tools and offers something called “Path,” which is an advanced financial planning feature to help you plan for significant life goals.

Key Features of Wealthfront:

Low Fees: Wealthfront charges an annual fee of 0.25%, which is quite reasonable.
Comprehensive Tools: Wealthfront offers a planning tool that allows you to view your financial health holistically, including retirement planning and even saving for a house.
Automatic Rebalancing: Similar to Betterment, Wealthfront will automatically rebalance your portfolio to ensure it’s in line with your goals.

Wealthfront also offers a cash account with a high-interest rate, which is helpful if you want to keep some funds in cash but still earn a bit on it. The platform is a great choice for someone who wants to take advantage of more advanced features as their investing needs grow.

3. M1 Finance: Customizable and Flexible

If you’re interested in more control over your investments but still want the benefits of automation, M1 Finance could be ideal for you. It is a blend of a robo-advisor and a traditional brokerage account, allowing you to create custom portfolios—called “Pies”—that are then managed automatically.

Why You Might Like M1 Finance:

Custom Portfolios: You can pick and choose different stocks or ETFs to build a portfolio that matches your preferences.
Fractional Shares: M1 allows you to invest in fractional shares, meaning you can own a portion of high-priced stocks even if you don’t have the full amount.
No Management Fees: Unlike most other robo-advisors, M1 Finance does not charge any management fees, though you’ll have to pay for any additional features you use.

M1 Finance is perfect for investors who like the idea of customization but also appreciate automated investment management. If you want to have some say in where your money goes but don’t want to be constantly buying and selling stocks yourself, this is an ideal choice.

4. SoFi Automated Investing: Free Management and Member Perks

SoFi is another platform that’s making waves in the robo-advisor space. SoFi Automated Investing is designed for investors who like perks and want access to both automated investing and some human financial planning.

Key Highlights of SoFi Automated Investing:

No Management Fees: SoFi stands out because they don’t charge any management fees. This makes it a budget-friendly option.
Access to Human Advisors: SoFi offers free access to human financial advisors, which is quite rare for a robo-advisor.
Member Benefits: By using SoFi, you’re also joining a community that offers perks like career coaching, member events, and rate discounts on loans.

If you appreciate member perks, want free access to human advisors, and don’t want to pay management fees, SoFi Automated Investing might be your best choice.

5. Acorns: Invest Your Spare Change

Acorns is unique compared to other robo-advisors because it focuses on micro-investing. Acorns automatically invests your spare change by rounding up your daily purchases to the nearest dollar and putting that extra money to work in an investment portfolio.

What’s Unique About Acorns:

Round-Up Feature: Acorns automatically rounds up your everyday transactions and invests that change, making it effortless to grow your wealth.
Subscription-Based: Acorns charges a flat monthly fee, starting at $3 per month.
Cash-Back and Bonuses: Acorns partners with popular brands, offering you cash-back when you spend with specific merchants. This cash-back is automatically invested into your portfolio.

If you struggle to save and invest because you think you don’t have enough money, Acorns is a great choice. Its micro-investing feature ensures that you’re always investing, even if it’s just a few cents at a time.

Best Robo-Advisors Available on Amazon

Now, while you can’t directly buy a robo-advisor on Amazon, there are several products and resources that can help support your investing journey when using a robo-advisor.

1. Books on Personal Finance and Investing

“The Intelligent Investor” by Benjamin Graham: This classic is considered a must-read for any investor, whether you use a robo-advisor or not. It helps you understand the principles of investing and how markets work.
“Rich Dad Poor Dad” by Robert T. Kiyosaki: This book can help you develop the right mindset around money, which is crucial for making long-term investment decisions.

2. Tracking and Organizational Tools

Budget Planner/Financial Organizer: Keeping your finances in order is important. A budget planner like the GoGirl Budget Planner is available on Amazon and can help you track your spending, investments, and savings goals.
Investment Log Book: Something like an Investment Tracker Journal can help you keep a physical record of your investments, returns, and goals. These can be useful for both your robo-advisor investments and any other accounts you may have.

3. Gadgets to Keep You Focused

Amazon Echo Dot: You can even use Alexa to track market news or remind you about key financial goals. It’s a handy tool for keeping yourself organized.

How to Pick the Right Robo-Advisor for You

Choosing the right robo-advisor can be daunting since there are so many options out there. However, keeping a few key points in mind can simplify your decision:

Determine Your Goals: Are you investing for retirement, an emergency fund, or short-term savings? Different robo-advisors are tailored to different goals.
Fee Structure: Look at the management fees and any other costs that may be involved. If you’re fee-sensitive, something like SoFi, which doesn’t charge management fees, might be ideal.
Desired Level of Control: Do you want to set it and forget it, or do you want to have some say in what your money is invested in? Betterment is a good set-it-and-forget-it platform, while M1 Finance lets you take control.
Extra Perks: Some platforms, like SoFi, offer extra perks like financial coaching or discounts on loans. Consider whether those add value for you.

Tips for Maximizing Your Investments with a Robo-Advisor

Once you’ve chosen your robo-advisor, there are some tips that can help you maximize your returns:

Start Early: The earlier you start investing, the more you’ll benefit from compound interest. Even small amounts will grow significantly over time.
Automate Deposits: Most robo-advisors allow you to set up recurring deposits. Automating your contributions is one of the best ways to stay disciplined and keep growing your investments.
Revisit Your Goals: Many robo-advisors let you adjust your goals. As your financial situation changes, make sure your investments align with what you need—whether that’s a different timeline or a new risk level.
Don’t Panic During Market Fluctuations: Robo-advisors are designed for long-term investing. Markets go up and down—don’t panic-sell during a downturn. Stay focused on the long term.

Wrap-Up: Investing Made Easy

Robo-advisors are an excellent tool if you want to start investing without the stress of managing your portfolio day in and day out. Whether you’re looking for something beginner-friendly like Betterment, a no-fee option like SoFi, or a tool that gives you more control like M1 Finance, there is a robo-advisor out there that will meet your needs.

Don’t forget that investing doesn’t need to be overly complex or stressful. With robo-advisors, the power of investing is available to anyone—you don’t need a degree in finance or a high-powered Wall Street job. Just a little time, some money to start, and a willingness to learn. So why not take that step today and explore which robo-advisor might be the perfect fit for you?

Happy investing!