Looking for an easy way to invest your money that leverages the latest in artificial intelligence and algorithm-driven portfolio management to deliver solid returns and low fees?
Welcome to the world of robo-advising!
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Comparing your choices among robo-advisors
Some 10 years ago, the first robo-advisor services arrived on the scene, utilizing AI and algorithms to build out portfolios — typically using ultra low-cost exchange traded-funds — to give you an alternative to paying big bucks for financial guidance.
Robo-advising is something that typically appeals to the millennial set, who don’t seek as much face-to-face interaction with financial professionals as Baby Boomers or Generation X might.
In an effort to appeal to a wider demographic than just 20-somethings, many robo-advisors offer a hybrid model that includes input from a human advisor in addition to an algorithm.
As a general rule, these hybrid flavors are premium services that come with extra fees.
If you want to look strictly at the entry-level robo-advisor options that don’t include the human touch, these are some of the big players in the field and how much they charge to manage your money:
| Name | Minimum investment to get started | Annual fees | Average costs of underlying investments |
| Rebalance | $100,000 | 0.50% | 0.15% |
| Vanguard Personal Advisor Services | $50,000 | 0.30% | 0.08% |
| Schwab Intelligent Portfolios | $5,000 | 0.00% | 0.14% |
| Fidelity Go | $5,000 | 0.35% | 0.37% |
| SigFig | $2,000 | 0.25% | 0.12% |
| Betterment | $0 | 0.25% | 0.10% |
| Wealth Simple | $0 | 0.50% | 0.12% |
| Ellevest | $0 | 0.25% | 0.06% to 0.16% |
Money expert Clark Howard has long said that if you’re just starting out or are younger in life, a robo-advisory firm is a reasonable way for you to get financial guidance and direction on the cheap.
But later in life, after you’ve built up substantial assets, he also says there’s no substitute for a well-trained and educated human being like a fee-only financial planner.
A fee-only financial planner can provide invaluable guidance for when you’ve amassed a sizeable portfolio and it’s getting closer to when you’re going to spend it!
