Robo-advisors are software programs that investors can use to manage their investment portfolios. They utilize computer algorithms and require minimal human intervention to take care of your venture.
Traditionally, if you wanted to grow your investment portfolio, you only had two options. The first one is to do it yourself and take the time studying different asset classifications to find the one that suits your goals. Another way is to hire a financial advisor, whose job is to help you look for the best investments and trade during the optimal times to ensure profitability.
The robo-advisor has been developed as a low-cost alternative to human financial advisors. It allows you to leave your portfolio growth on autopilot without neglecting the quality of your investments.
So, if you’re looking for the right software, here are the best robo-advisors of 2020:
Two of the top advantages that Betterment — one of the first robo-advisors in the market — has over other robo-advisors are user-friendly layout and platform and competitive pricing. This may be the reason why the company has over 270,000 active users and $16.4B in assets under management.
After creating your account, the software automatically creates a portfolio that aligns with your financial needs and goals. Moreover, the terms of the portfolios are clear before funding, so you know where your money’s headed. You can also modify your portfolio risk or change to another type with ease.
Whether you’re saving for your retirement or just want to make your money work for you, Betterment offers several portfolios for your perusal. You can choose from stocks, bonds, and other asset classes.
The platform doesn’t require a minimum deposit for creating an account. You just pay a 0.25% management fee for your portfolio.
Another big name in the industry is Wealthfront. It was founded in 2008 and has catapulted itself into one of the top robo-advisor software in the market.
The platform aims to help users with passive investing while managing the risks involved according to your goals. Wealthfront’s primary advantage is that it offers free financial planning services, where the company helps you with personal decisions, like whether you can afford a home in a particular city or when is the optimal time for you to retire.
One major benefit of robo-advisors over banks is lower maintenance fees. Similar to Betterment, Wealthfront charges a fixed management rate of 0.25% annually.
You do need a minimum deposit of $500 to create an account.
Ally Invest’s zero account minimum and trading commissions attract investors of all levels. The platform also offers a $0.50 options-contract fee, which is one of the lowest prices in the market.
The channel integrates banking capabilities into its investing functions, which makes your funds more liquid. It has a self-directed trading feature, which is ideal for hands-on traders. Meanwhile, you can still avail of the managed portfolio option, which offers the typical robo-advisor functionalities.
As mentioned above, Ally Invest doesn’t charge a fee for managing your portfolio. Plus, the minimum deposit is just $100 for an account.
SoFi Invest is best for beginner investors because of the educational resources it offers to users. The platform helps you plan out your investment portfolio according to your goals. It also grants you access to human financial advisors and career services.
The robo-advisor also has an automatic rebalancing feature, where the software adjusts your stock and bond funds each quarter. This way, you get optimal results on your investments.
The platform also promotes portfolio diversification, which ensures that your funds are allocated to different types of investments. This practice is one way to minimize the risks that come with investing.
SoFi Invest doesn’t charge a management fee as well as a minimum deposit.
Ellevest is a unique robo-advisor that factors in women’s needs, like lower incomes and longer lifespans. The platform has two investing levels for its users’ needs.
The first one is Ellevest Digital, which has a 0.25% annual management fee and zero minimum account deposit. The other is Ellevest Premium, which charges a 0.50% fee and has a $50,000 minimum requirement.
Ellevest also has an automatic rebalancing feature along with tax minimization. With the premium account, you get access to financial planners and coaches.
Robo-advisors have changed the financial industry by utilizing computer algorithms and machine learning to help users achieve their investing goals. So why not choose from one of the top five software programs and start building your wealth?
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