Cheapest Robo-Advisors (and Free Ones too)
The robo-advisor market has exploded and it has become nearly impossible to rank the platforms in terms of best to worst. After all, almost all robo-advisors are designed to provide valuable investment management with lower fees than live financial advisors. Fortunately, there are many excellent low fee robo-advisors to cut investment management expenses to the bone.
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In contrast with typical financial advisors, who typically charge 1.0% or more to manage your money, low-fee robo advisors do a great job with investment management with affordable funds and low management fees.
*Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link.
All of the lowest fee robo-advisors offer:
- Rebalancing of your investments
- Diversified investment choices
- Low management fees
- A variety of account types
- High level security
- Robo investing apps
Where they differ is with number of investment choices, other types of services including cash management, financial advisor access and minimum investment amount.
Here’s a list of the lowest fee robo-advisors and a few free digital investment platforms. The following 6 robo-advisors combine excellent service, accessibility and variety with small—and even non-existent—fees.
Lowest Fee Robo-Advisors
1. M1 Finance – Free Robo with Stocks and ETFs
Best for: Investors who want investment management along with the opportunity to invest on their own.
Management Fee: $0.00 – Basic, $125 per year – Plus
Minimum: $100
M1 Finance just might be the best of both DIY and robo investment platforms. And, M1 Finance is free. Not only that, you only need $100 to get started with M1 Finance.
What makes M1 Finance stand out in the robo-advising arena is its delicious take on portfolio creation:
- Investors create pie charts to visually design their portfolios.
- Investors can customize up to 100 slices of pie to include EFTs, stocks, or even other pies from a pool of stocks, ETFs and more.
- The visual nature of this platform makes it easy to see that your investing style is reflected in the investment options you have chosen.
M1 manages your portfolios and rebalances the investments back to your preferred asset allocation.
For investors not sure where to start, M1 Finance also offers pre-made expert pies to choose from such as hedge fund, income, retirement portfolios and more.
Similar to other robo-advisors, you can select a pre-made investment portfolio according to your risk tolerance from conservative to aggressive.
Additional M1 Finance Features:
- Line of Credit
- High yield cash account
The benefits of M1 Finance span the opportunity to invest across a wide swath of the investment markets, automatic rebalancing and the lack of investment management fees. In case you forgot, M1 Finance is free.
Investors that want an additional trading window and a high yield cash account along with other benefits can sign up for M1 Plus, for a small annual fee.
Read: M1 Finance Review
2. SoFi Automated Investing – No Minimum, No Management fee
Best for: Younger investors seeking community and lending solutions too.
Management fee: $0.00
Minimum: $1.00
SoFi might be best known as a student loan and all-around lending site, but the company also offers a good investment management robo advisor. In fact, SoFi Invest has built out a full-scale investment platform.
The fact the investment advisor doesn’t charge a management fee, offers financial advisors and has a $1 minimum investment amount makes it one of our favorite lowest fee robo-advisors.
SoFi Invest (Formerly called SoFi Wealth) includes the following investing services:
- Automated Investing (this is the SoFi robo advisor) – The SoFi robo-advisor invests your money in diversified exchange traded funds, or ETFs and manages it for you. Check out SoFi automated investing now.
- Crypto Investing – Cryptocurrency trading platform.
- Active Investing – This SoFi stock investing platform allows you to buy shares of stock or even partial shares and get started investing on your own, for free. Free stock market investing for as little as $1 per share, similar to Robinhood and M1 Finance.
- SoFi ETFs – SoFi offers several ETFs including: SoFi Select 500 (SFY), SoFi Next 500 (SFYX), SoFi 50 (SFYF), SoFi Weekly (WKLY) and SoFi Gig Economy (GIGE).
SoFi Invest Automated Investing is a feature-rich robo-advisor with financial and career advice as well as a diversified and managed investment portfolio.
Read: SoFi Invest Review
3. Wealthfront – Individual Stocks, ETFS and Crypto
Best for: Tech savvy customers comfortable with all-digital robo-advisor and those seeking to customize standard managed portfolio with ETFs and crypto funds.
Management Fee: 0.25% AUM (free management promo – click here).
Minimum: $500
Clients can start with Wealthfront’s digital investment portfolio management for only $500, making this robo-advisor easily accessible if you want to start investing without the massive upfront cost.
Wealthfront’s fees are predictable and fair: the first $5,000 of any portfolio is managed for free, and accounts valued over $5,000 are managed for 0.25%.
Wealthfront offers a free portfolio check up and home buying guidance, which sets it apart from many low fee robo-advisors. The Path Digital financial advisor is comparable to a live financial planner and able to answer up to 10,000 money management questions. Find out when you can retire, how much it will cost to send your kid to college and whether you can afford to take some time off from work.
Here are a few of Wealthfront’s stand out features:
- Path is Wealthfront’s fully mobile financial planning experience. Path gives you outstanding digital financial planning advice.
- Access to more than 200 ETFs and two crypto funds to add to your existing portfolio or to create your own, for Wealthfront to manage.
- Tax loss harvesting
- Plans for individuals who own and want to sell company stock
- Direct stock investing for portfolios over $100,000. These are tax-optimized to help increase your returns and lower taxes.
- Risk parity fund
- Wealthfront Cash management account with high interest rate and zero fees. Direct access to the Wealthfront Cash Management Account with high interest rates.
- Wealthfront Borrow – line of credit
- Many account types including a 529 education account
One of the earliest robo-advisors, the low fees and vast features make Wealthfront one of our favorite low-fee robo-advisors.
Wealthfront Cash Account
- Zero account fees – no overdraft fees, management fees, or minimum balance fees
- Wealthfront Cash account minimum – $1 to get started
- Unlimited fee-free transfers
- Transfer into Wealthfront’s award-winning investment account within minutes
- Up to $2M FDIC insurance through partner banks (and up to $4M FDIC insurance for joint accounts) – that’s 8x the amount available in a traditional bank account.
Read: Wealthfront Review
4. Betterment – Low Fee Robo-Advisor With Financial Advisors
Best for: Investors who want a low fee robo-advisor and access to financial advisors.
Management Fee: .25% AUM – Basic, 0.40% AUM – Premium
Minimum: $0.00
Betterment offers goal-specific investment advice. The top features at Betterment include:
- Free portfolio review
- Socially responsible, income and smart beta portfolios
- Free Betterment Cash high yield checking and savings account
- Access to a la carte financial planning sessions for digital investors.
This robo-advisor does not have a minimum balance requirement, and offers different fee structures:
- Betterment Digital charges 0.25% AUM for accounts up to $2,000,000.
- Betterment Digital clients have access to low-cost financial planning packages that range from $299 to $399.
- Betterment Premium is for accounts worth over $100,000 and charges 0.40% AUM. Clients with Betterment Premium receive unlimited access to human financial planners.
One of the benefits of Betterment is that it allows clients to set up multiple goals with specific investment advice for each goal, including the Retirement Guide Calculator. You can link external accounts and the platform will provide goal based advice that considers all of you assets. Although the robo-advisor portfolio recommendations don’t take external accounts into consideration.
Betterment also offers tax loss harvesting, investment rebalancing, and many fund choices including Vanguard and iShares ETFs and international bonds. Cryptocurrency portfolios from Makara are coming soon.
One of the oldest robo-advisors, Betterment has the most assets under management of any stand alone robo-advisor.
Click the button to get access to get free investment management at Betterment.
Read: Betterment Review
5. SigFig – Free Investment Tracker
Best for: Investors who want to leave their assets with their existing investment provider.
Management fee: Free portfolio tracker and first $10,000 managed for free. 0.25% AUM – $10,000+ account value.
Minimum: No minimum for free portfolio tracker. $2,000 for investment management.
SigFig manages and tracks your investments that are held in Fidelity, Schwab or TD Ameritrade (soon to merge with Schwab) accounts. This is great for investors who already have accounts set up and don’t want to transfer them.
We like SigFig for several reasons:
- Accounts valued at less than $10,000 are managed for free. Above $10,000 the 0.25% AUM management fee is quite competitive.
- SigFig offers a free investment tracking and analysis tool.
- Managed portfolios within taxable accounts are eligible for tax-loss harvesting
- Financial advisors are included, a sound benefit at this management fee level.
Although reasonable for most investors, the $2,000 investment minimum is higher than that of Wealthfront, Betterment, Sofi Invest and M1 Finance. SigFig also lacks cash management services offered by many competitors.
A positive attribute is SigFig’s ability to analyze outside holdings, not managed by SigFig.
If you want low fee investment management and don’t want to transfer to another account, then SigFig is a sound choice.
Read: SigFig Review
6. Schwab Intelligent Portfolios – Free and Premium Robo-Advisor
Best for: Investors seeking low fee investment management from a large financial services firm.
Management fee: $0.00 – Digital. $30 per month with $300 set up fee – Premium.
Minimum: $5,000 digital. $25,000 – Premium with financial planner access.
Schwab Intelligent Portfolio brings it home with $0 in advisory fees for the basic service. They also do not charge commissions or account service fees for their basic program. The minimum balance for this robo-advisor is $5,000, which makes it out of reach for some beginning investors, but the benefits are certainly worth it in terms of services, access and available funds.
Schwab offers two tiers of service:
Schwab Intelligent Portfolios
- Fee-free investment management
- $5,000 minimum investment
Schwab Intelligent Portfolios Premium
- $30 per month pricing after one-time $300 set up fee
- $25,000 minimum investment amount
- Access to Certified Financial Planners
Both of the Schwab Intelligent Portfolios offer:
- Branch access
- Income portfolios
- Over 20 distinct asset classes and scores of low fee ETFs.
- Many account types
- Tax loss harvesting available for accounts valued at more than $50,000
- 24/7 customer service
In addition to its low fees, Schwab offers a wide range of accounts and many types of investments, including commodities, gold, inflation bonds and master limited partnerships. Branch access makes it easy to ask representatives about your account, although Certified Financial advisors are reserved for the Schwab Intelligent Portfolio Premium clients.
Schwab’s robo advisors have been criticized for requiring an 8% to 10% cash allocation in each of their portfolios.
In fact, I have a Simple IRA invested with the Schwab Intelligent Portfolio.
Read: Schwab Intelligent Portfolios Review
FAQ
Which robo-advisor has the best performance?
What are the types of robo-advisor fees?
What do the robo-advisor fees pay for?
What is the range of robo-advisor fees?
Are there free robo-advisors?
Lowest Fee Robo-Advisors Wrap Up
Finally, there are many cheap robo-advisors to benefit a variety of investors.
While this list is designed to help you find a robo-advisor that will balance service with low or no management fees, consider other factors as well when picking a digital investment manager.
As with any financial investment, do your homework. Even though Betterment charges more than Schwab for portfolio management, Betterment’s referral program might make it more appealing for some. Other robo-advisors might have more variety in terms of investment funds, making the slight increase in management fees worth it to certain investors.
Ultimately, consider which features best work with your financial goals.
For more robo-advisor guidance check out our Robo-Advisor Selection Wizard.
Related
- 5 Free Robo-Advisors
- Robo-Advisor Fees from Lowest to Highest
- M1 Finance vs Betterment
- SigFig vs. Betterment
- M1 Finance vs. SoFi Invest
- SoFi Automated Investing Review
Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link. That said, I never recommend anything I don’t believe is valuable
