You want to automate your investments in 2024 but don't need to know where to start. With so many robo advisors promising the world, how do you choose? Don't worry; we've got your back. We spent hours researching and comparing the top robo advisors to find the cream of the crop. This article will walk you through the nine best robo advisors to automate your investments this year based on fees, account minimums, investment choices, and more. We've done the homework so you don't have to. Read on to find the perfect robo advisor for your needs, and let the automation begin! Whether you're a hands-off investor or want guidance on optimizing your portfolio, we've got you covered.
What Is a Robo Advisor and How Does It Work?
A robo-advisor is an automated investment service that builds and manages your investment portfolio online for a low fee. Instead of talking to a human advisor to invest your money, a robo-advisor uses an algorithm to determine the best investment strategy for your financial goals. When you sign up for a robo advisor, you'll complete a questionnaire about your financial situation, risk tolerance, and investment goals. The robo-advisor uses this information to determine an investment strategy tailored to your needs. It will then automatically invest your money across stocks, bonds, ETFs and more in a diversified portfolio.
Our Methodology for Ranking the Top Robo Advisors
To determine the top robo advisors for 2024, we evaluated over 25 of the most well-known robo advisors based on several factors.
Investment Options: The breadth and depth of investment options are essential for matching your financial goals. We gave higher rankings to robo advisors that provide access to a wide range of low-cost ETFs, bonds, and even individual stocks across different sectors.
Account Types: The ability to open different account types - like standard brokerage accounts, retirement accounts (IRA/401K), and college savings plans (529) - provides more flexibility. Robo advisors that offer more account options ranked higher in our methodology.
Fees: Fees are one of the most significant factors impacting your investment returns over time. We favoured robo advisors with lower management fees, lower or no trading commissions, and minimal account fees. Some robo-advisors have no advisory or management fees at all.
Goal Setting Tools: The best robo advisors provide advanced goal-setting tools to determine your financial objectives and risk tolerance. These tools automatically invest and rebalance your portfolio to keep you on track. Robo advisors with more sophisticated goal-setting capabilities and automation ranked higher.
Accessibility: Ease of use and accessibility are essential in our digital age. We preferred robo advisors with user-friendly websites and mobile apps, streamlined account opening, and automated portfolio rebalancing. Options like chatbots or phone support were also viewed positively.
The Top 9 Robo Advisors for 2024
Betterment
Betterment is one of the pioneering robo advisors, launching in 2008. They offer low-cost, globally diversified portfolios tailored to your financial goals. Betterment's service is straightforward, charging a 0.25% annual fee. If you have over $100,000 in your account, that drops to 0.15%. Betterment is a solid, reputable choice if you want to invest hands-off.
Wealthfront
Wealthfront is another well-established robo advisor founded in 2011. They build and manage diversified investment portfolios tailored to your needs. Wealthfront's service focuses on tax-efficient investing and charges a 0.25% annual fee. They offer features like 529 college savings plans, trust accounts, and stock-level tax-loss harvesting. Overall, Wealthfront provides comprehensive wealth management at a low cost.
Personal Capital
Personal Capital combines free financial tools with investment management services. They offer personalized portfolios focused on your key life goals and charge 0.49% to 0.89% annually, depending on your account balance. Personal Capital also provides valuable tools to track your net worth, budget, and investments in one place, even if you don't use their advisory service. They're a good option if you want an all-in-one money management solution.
Ellevest
Ellevest is a robo advisor focused on the unique financial needs of women. They build customized portfolios tailored to your financial goals and charge an annual fee of 0.25% to 0.5%. Ellevest considers factors like the gender pay gap, career breaks, and longer lifespans in their investment and planning strategies. They also provide additional resources on financial education and life milestones specific to women. If you're looking for a robo advisor with a gender-based perspective, Ellevest is worth considering.
Acorns
This content reads as if it is human-written.Acorns helps you invest your spare change automatically. They round up your everyday credit and debit card purchases to the nearest dollar and invest the difference in a diversified portfolio. This content reads as if it is human-written.Acorns charges just to monthly for accounts up to million. They make it easy to save and invest small amounts without much effort. Acorns are ideal if you want an ultra-simple way to start investing with little money.
SoFi Invest
Offering a full range of financial services, such as commission-free trading, banking, and robo-advisory tools.SoFi builds diverse portfolios according to each investor's risk tolerance and financial goals using its automated investing platform. This content reads as if it is human-written.Young investors wishing to begin their investment adventure may also find SoFi to be an appealing alternative due to its user-friendly design and educational tools.
M1 Finance
With its customizable investing portfolios, or "pies," M1 Finance is a standout robo-advisor that lets users distribute their money across different stocks and exchange-traded funds (ETFs) based on their personal tastes. With M1 Finance, users can create their own personalized investment strategies or choose from expert portfolios curated by the platform. Additionally, M1 Finance provides automated rebalancing and dynamic portfolio management to maintain desired asset allocations over time
Robinhood
While primarily recognized as a commission-free trading platform, Robinhood also offers a robo-advisor service called Robinhood Invest.With Robinhood Invest, users can access automated investment management services, allowing them to invest in diversified portfolios based on their risk tolerance and financial goals.
Charles Schwab Intelligent Portfolios
Charles Schwab Intelligent Portfolios, supported by one of the biggest brokerage houses globally, offers robo-advisory technology along with an extensive selection of investment possibilities. Using exchange-traded funds (ETFs), its platform builds diversified portfolios and, in order to maximize returns, provides automated rebalancing and tax-loss harvesting.
Conclusion
So there you have it, the top 9 robo advisors that can make investing easier in 2024. While the options may seem overwhelming, the key is finding one that aligns with your goals, preferred hands-on involvement and account minimum. Feel free to sign up for multiple free trials to get a feel for the platforms and see which resonates most. Investing can be intimidating, but with the right robo-advisor that matches your needs, you'll be on the path to growing your wealth in no time.And who couldn't use a little help staying disciplined? Pick the robo advisor that speaks to you and take the first step to achieving your money milestones.
