Robo-advisors are a great way to invest in stocks and mutual funds without necessarily needing a comprehensive understanding of ETFs (Exchange-traded funds), stocks, bonds, etc. You can always get started right away using a Robo- Advisor app if you have money for investment. You do not have to go through the rigors of researching the ins and outs of stocks, bonds, or ETFs to know the ideal time to invest. The Robo- Advisor will automatically select an investment for you that will yield high returns.
What is a Robo Advisor?
The robo-advisor is a computer program that combines algorithms and investment management with your financial objectives to build a portfolio for managing your assets. It selects a portfolio of stocks, ETFs, and others to diversify the risk of investing in one fund and guarantees you high returns.
You only need to set up an account online then you are good to go. Tax-loss harvesting, portfolio rebalancing, and other excellent automated features make it a cheaper alternative to a traditional financial advisor. Here are a few Robo – Advisor apps you need to consider.
SoFi
The services offered by SoFi including, banking, investing, and lending, are among the best available in the industry. In 2011, the company started as a student lender. Since then, its popularity has grown exponentially. You do not need to have a minimum balance to start investing, and there are no fees associated with automated investing. For as little as $1, you can start investing now. Additionally, you can access human-certified financial planners for specialized services at no cost.
The app will not provide you with financial advice or products you do not require. Their service provision is accurate and customer-specific. Its easy-to-use and intuitive features make SoFi an ideal mobile application. It has features such as; automatic rebalancing, goal planning, and an option between IRA and taxable accounts.
Pros
- It does not require a minimum balance to open.
- It is absolutely with no management costs included.
- It gives financial coaching and free financial planning appointments to all customers.
- Its features help accomplish multiple goals simultaneously.
Cons
- It does not have the automated tax-loss harvesting feature.
Betterment
Betterment is the best app for beginners because of its user-friendly features, intuitive capabilities, and infinite educational resources. As one of the earliest Robo-Advisor apps, it has gained market dominance. You will find solutions to your investment needs, brokerage services, and IRA accounts here. You can open an account with Betterment with no minimum fee and receive automatic investment features like tax-loss harvesting, rebalancing, and customized portfolios. Tax-loss harvesting allows you to sell assets that aren’t performing at a loss and buy a similar investment to offset taxable gains and income.
If your employer chooses Betterment as a plan administrator, Betterment charges 0.25% management fees for taxable, retirement, IRA, and 401(k) plans. As long as you’re willing to pay 0.04% and have at least $100,000 in your account balance, you can access a permanent financial advisor for all your financial needs.
Pros
- A standard account does not require you to have a minimum balance.
- It can support multiple types of investment accounts you want to set up.
- All taxable accounts have tax-loss harvesting.
- You can sync all external profiles to the app to keep track of all your finances.
Cons
- 0.25% is a bit steep. Some companies have lower charges.
- To access a financial advisor, you need to have a minimum balance.
Stash
It is an investment app that allows you to save for retirement. Once you sign up, it will ask you a few questions to determine your risk tolerance and financial goals. Afterward, the app will suggest more than 60 ETFs based on your needs. There are three levels of Stash, the beginner level, growth level, plus level. Depending on the type of account you own, the monthly fee can range from $1- $9. In addition, you only require only $5 to start an account and have their money invested automatically.
The Stash app provides you with the option of investing in fractional shares. Therefore, you can buy a fraction of the stock without necessarily having to buy all the stock. The feature allows you to diversify your investment risks.
You can use Stash to analyze your spending patterns to see how much extra money you have available. Once you know what you can save up every month, you can use the app to invest your extra cash.
Pros
- It matches you with the investment suitable for you automatically.
- You can invest in fractional shares.
- It can help you track your spending pattern.
Cons
- It has a monthly fee.
Wealthfront
Founded in 2008, Wealthfront is a top Robo-Advisor app ideal for beginners. The app combines planning, banking, goal-setting, and investing. It includes automatic rebalancing and utilizes Modern Portfolio Theory to allocate investments across exchange-traded funds. The app has an excellent investment method that enables you to maximize investment returns by taking advantage of tax-loss harvesting. The app also offers features that assist in planning, risk management, and building a portfolio of stocks.
All investments require a 0.25% advisory fee, no trading commission, no withdrawal or transfer fee, and no minimum fee. For 529 plans, the range is from 0.42%-0.46%. You can access Path with a Wealthfront account. Path helps you to analyze your financial position. It also integrates the data in your account with third-party data sources to assess your financial status. If you have a balance of $100 000, you can access the stock-level tax-loss harvesting. To gain access to Wealthfront’s Smart Beta program, you need a minimum balance of $500 000 or more (it optimizes how you invest).
Pros
- All the accounts have tax-loss harvesting.
- You can run multiple accounts; retirement, taxable, and 529 college savings.
- It has excellent financial planning to help you see the bigger picture.
- The portfolio line of credit is available.
- If you have multiple financial goals, the Path feature shows you trade-offs you might face.
Cons
- Advanced features require a minimum balance of $100,000 or $500,000.
- Mutual funds in larger accounts may be more expensive.
- There is no online chat for customers.
Acorns
The app is perfect for micro-investing and doesn’t require much to get started. There is no minimum investment fee. You can sign up for as little as $1. You can invest as low as $5 per month and for as low as $3 a month for a spending account. Small accounts have high fees that could be a disadvantage for customers. It gives you five choices to select a portfolio where you can choose to link up your credit card or debit card. It combines Robo – Advisor tools with automated saving software that will help you to achieve better results.
It also allows you to save up some money by rounding up your leftover change into your investment account. Fees for exchange-traded funds are 0.1%, which is a low cost of investment. A notable exception to the platform is saving for college students (they are free).
Pros
- Charges no minimum fee for opening an account.
- It is ideal for investing in retirement.
- You do not have to log in frequently to make deposits (it has automated investments).
Cons
- The fees incurred on small accounts are high.
Vanguard Digital Advisor
As one of the world’s largest passive investment management firms, it is known for its portfolio management services. It has human advisors that assist with making an investment portfolio to reach your financial goals. It also has an advanced Robo- Advisor that enables you to set up your retirement goals for optimum success.
Financial advisors do not work on commission hence do not have any financial incentive to recommend certain products. Due to the nature of the idea, you will only get matched with stocks that are beneficial to you.
To access the Advanced Vanguard Digital Advisor, you need to have a minimum balance of $3000 in your account. The advanced option allows you to access data from top companies that will help you diversify your investment portfolio for high returns. You will get years of access to the data and unlimited access to low-cost ETFs.
Pros
- No trading or commission fees.
- There are financial advisors.
- It is easy to set up an account.
Cons
- The net advisory fee is 0.15% annually which is around $ 4.50 per $3000 with proper management.
M1 Finance
It is ideal for sophisticated investors due to its user-friendly automated investing features that allow customers to create portfolios according to their needs. Due to its highly customizable features, you can create accounts with low-cost ETFs or stocks. The platform does not charge fees for transfers or withdrawals and does not impose trade fees, as the portfolio management structure remains the same. You can set up an account for $125, which gives you a daily trading window and a discount on interest rates when taking out a loan with M1 Borrow.
Additionally, there is an M1 spend feature that allows you to earn interest. On M1 plus, you can get lots of discounts and offers.
Portfolios with stocks do not have management fees, while ETFs have management fees ranging from 0.06% to 0.20%. It has an account termination fee and accounts with less than $20 with no activity within 90 days have charges.
Pros
- Fractional shares are available for trading.
- There is no fee for asset management and trading.
Cons
- No financial advisors
- No help in setting financial goals.
- Accounts with no activity for 90 days and a balance of less than $20 have a fee.
Blooom
Bloom analyzes your 401(k) plan or IRA for allocation, fees, and diversification to help you choose the best investments. It allows you to manage your brokerage account daily and updates your account after every three months when necessary. There is a charge of $45 on an essential account (with a personalized portfolio), $120 on a standard (with a personal portfolio, auto optimization, and access to an advisor), and $250 on an Unlimited account (with standard features and unlimited access to advisors).
Pros
- No account minimum for opening an account.
- Standard accounts have advisor access.
Cons
- Non-retirement investing is not available.
- Standard and Unlimited accounts fees are a bit steep.
Bottom line
Investing and managing assets is easier with Robo- Advisor apps. When you first start investing, you will undoubtedly increase your savings as you go.
Even without managing your assets personally, automated investing allows you to grow financially as an investor. Consider Robo-Advisor apps when investing for experienced companies to handle your finances while maximizing your profits.
