The best robo-advisors of 2017: A cheaper and easier way to invest

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The best robo-advisors of 2017: A cheaper and easier way to invest
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It used to be that if finance befuddled you, you probably would have shied away from investing.

But with the advent of robo-advisors — firms that build you a portfolio using artificial intelligence and quantitative analysis of markets — that’s all changed.

Now for a low fee, you can have machine guidance help you build your financial future one dollar at a time.

Many robo-advisors even offer the option of having a human offer his or her guidance, too!

So with investing being made so easy and affordable, the only question that remain is: With so many robo-advisors out there to choose from, which one will do the best job with your money?

RELATED: Relying on the government to fund your retirement is a very bad idea

See 2017’s top-performing robo-advisors

BackEnd Benchmarking, which puts out the quarterly Robo Report, is out with new numbers that look at nearly two dozen popular robo-advisor services and how they performed so far in 2017.

The leader so far this year has been Betterment, with a return of 11.97%.

There’s no minimum balance required to get started with Betterment and an annual fee of just .25%

Robo-advisor performance in 2017
Robo-advisor performance in 2017

The best of the rest

Other top performers for 2017 include Schwab Intelligent Portfolios (11.93% return), E*Trade Adaptive Portfolio (11.61%) and Fidelity Go (11.29%-11.46%).

Honorable mentions go to Vanguard Personal Advisor Services (11.41%), WiseBanyan (11.32%) and SigFig Advisor (11.05%).

Of course, we should note that with the S&P 500 yielding year-to-date returns in the neighborhood of 16%, none of these robo-advisors “beat the market.”

But a one-year return of around 11% on your money is nothing to sneeze at either!

(Editor’s note: The S&P 500 is an index that tracks the market performance of 500 of the largest companies. It’s widely seen as a leading indicator of what markets are doing at any given time.)

Keeping your fees low is crucial!

As money expert Clark Howard has long said, keeping your fees and expenses low when you invest is key to having more money in retirement.

In fact, just a 1% increase in annual fees can equate to having $80,000 less down the road!

So with that in mind, here’s a rundown of fees for the robo-advisors on this list:

Robo-advisor fees
Robo-advisor fees

The best fee of all: Zero!

A couple of players here offer no fees at all.

For example, Schwab Intelligent Portfolios has no advisory fees, account service fees or commissions.

One way revenue is earned is by routing trade orders through center market centers. Visit the Intelligent Portfolios website for further details on other ways Schwab earns its money for this robo-advisor service.

You need a minimum investment of $5,000 to get started with Schwab Intelligent Portfolios.

WiseBanyan, meanwhile, has no investment management, trading or rebalancing fees either.

They make money instead by offering “a la carté products and services designed to provide personalized value to our clients,” according to their website. But there’s never any obligation to buy any products or services.

The nice thing about WiseBanyan is there’s no minimum to get started investing.

RELATED: How to maximize your savings for the future

Robo-investing: An inexpensive way to start saving

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Theo Thimou About the author:
Theo is director of content for clark.com. He has co-written 2 books with Clark Howard, including the #1 New York Times bestseller Clark Howard's Living Large in Lean Times.
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