Robo-advisor fees: Who is the cheapest right now?

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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!

RELATED: Are you in the middle class? Here’s an easy way to find out

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!

More money stories on Clark.com

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Theo Thimou About the author:
Theo has co-written several books with Clark Howard, including the New York Times #1 bestseller Living Large in Lean Times. As a single widowed parent of two young children, he strives to bring unique savings tips to men and women like him who must face life without their spouses. He can be reached at [email protected]
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