A Guide to Automated Investing and the Best Robo-Advisors

Are you one of the millions of people that have recently begun personal investing? If so, you might have some questions about the process of automating your portfolio strategy and working with robo advisors. In this article, we're defining these terms and providing our picks for the top robo advisors on the markets, and the needs that each one meets best!
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The past few years have seen a skyrocketing increase in the number of personal investors entering the financial market. In 2020, retail, or individual trading doubled its share of total market volume, accounting for up to 25 percent of all activity, a historic high according to Citadel Securities

In conjunction with this increased activity level, is the rise of automated investing and robo advisors. Eight percent of American households have a robo-advisor account, according to data analytics firm Hearts & Wallets. Although this number may seem small, this group has an outsized impact, as the assets they manage are projected to reach $2.5 trillion by 2023, with an annual growth rate of 20.11 percent. 

Oftentimes, the major element holding individuals back from diving into this new world of financial management is lack of knowledge about these new tools and digital platforms. Does this sound like you? If so, read on to learn more about the process of automated investing, the most popular robo advisors on the market, and how to determine if these strategies are right for you! 

What is Automated Investing?

Automated investing is an umbrella term that refers to any investment decisions made by a computer algorithm. As it applies to personal investment, this means receiving algorithmically generated advice tailored to areas of financial planning like retirement and portfolio management. Typically, a client will input their information to an automated platform, including their current financial situation, risk tolerance and goals. Then, the advisor will use that data to make recommendations and potentially perform these actions on a user’s behalf, no human required!

So far, these business intelligence tools have mainly attracted the interest of high-net-worth individuals (HNWIs), with 49 percent choosing to utilize their services, according to Insider. However, significantly lower fees compared to human advisors, as well as generally increased market activity is likely leading to widespread adoption. Beyond cost benefits, consumers are turning to automated investment for a myriad of reasons. These platforms normally utilize Modern Portfolio Theory, which can eliminate individual risk by diversifying assets. Human biases such as emotional attachment or confirmation biases are eliminated in this process. Additionally, spiffy user interface and the ability to make trades or changes 24 hours a day, seven days a week, make automated tools efficient and convenient for those not interested in working around a traditional financial institution’s rigid schedule. Overall, these tools can be an affordable and powerful way for anyone to prepare for their financial future. 

What are Robo Advisors?

If automated investing describes the type of strategy, robo advisors are the digital platforms themselves that provide the automated and algorithmic investment services in question. This technology first emerged in the consumer market all the way back in 2008, when Betterment launched and later exploded in popularity in wake of the Great Recession. 

The shift toward FinTech has proven disruptive to the financial services sector. As the technology has developed, robot counterparts have become capable of handling sophisticated tasks, such as tax-loss harvesting and retirement planning. The primary product of most providers is the ability to build passive indexed portfolios for their users. Portfolios are rebalanced by assigning target weights to asset classes, like emerging market equities, domestic blue chips and government bonds. This process, which used to be considered somewhat prohibitive due to its time-consuming nature and high fees, is easy and virtually no-cost when done automatically. 

Robo Advisors actually hold the same legal status as their human counterparts, and are required to register with the U.S. Securities and Exchange Commission (SEC). Almost all popular robo providers are also registered with the independent Financial Industry Regulatory Authority (FINRA), which helps assure consumers that their money is in safe hands.

The Best Robo Advisors for Consumers

Currently, hundreds of robo advisors have made their way to the U.S. market and offer a combination of services, including portfolio management, retirement planning and overall financial services and advice. Some of these services operate as stand-alone, while others are next-generation asset management offerings from legacy institutions you’ve likely heard from. Some are even geared towards sustainable/ethical investing or other areas of specific interest. Below, we’ve compiled some of the most popular and trusted robo advisor providers available right now, to help you narrow down your decision. 


Assets Under Management (AUM): $28.3 Billion

Account Minimum: $10

Fees: $0.25% Annual for Digital Plan, 0.40% annual for the Premium Plan

Summary: One of the original movers into the digital space, is also an excellent choice for those just moving their assets into the field. Their onboarding process is optimized for the mobile experience, and only requires users to enter their age, annual income and overall financial goal. In addition to offering five portfolio types users can switch between, the firm has also launched Betterment Everyday, its cash management suite for checking and savings accounts. 

Best For: Beginners to Robo Advisors and Cash Management 


AUM: $24.9 Billion

Account Minimum: $500

Fees: $0.25% after the first $5,000. No trading commission or withdrawal, minimum or transfer fees. 

Summary: Wealthfront is another market leader that sets itself apart with its elegant yet intuitive suite of financial planning tools. Its’ path service allows users to explore multiple potential financial options and build out individualized scenarios for making big purchases, retirement and more. Their handy Autopilot feature monitors users bank accounts and automatically moves funds above monthly spending needs into an investment or high-yield savings account. 

Best For: Goal setting and minimizing overall fees. 


AUM: $1.4 Billion

Account Minimum: None for fully automated accounts, $2,000 for managed accounts

Fees: 0.25% after the first $10,000

Summary: SigFig combines the best of automated and human money management, with its offerings including portfolio rebalancing and tax loss harvesting. A key differentiator is its free portfolio tracker, which requires no minimum investment and allows users to collect their entire portfolio in one place. Their upper tier accounts are granted access to human advisory services, which complements their core product. 

Best For: Those who still want access to a human advisor


AUM: $1.0 Billion

Account Minimum: None

Fees: $1, $5 or $9 monthly subscription fees, no trade commission fees

Summary: Ellevest is on a mission to close the gender money gap and its proprietary algorithm calculates financial goal targets to meet gender-specific needs of each client. Although the product was designed with women investors in mind, they welcome members of all gender identities. Depending on their monthly subscription level (Plus, Premium or Executive), users can manage up to six investing goals and are granted access to retirement planning tools. 

Best For: Female investors or anyone interested in goal-based strategies

Fidelity Go

AUM: $566.2 Billion

Account Minimum: $10

Fee: $3/month for accounts with balances of $10,000-$49,999. 0.35%/year for larger accounts. 

Summary: This legacy firm has made strong moves into the robo space with Fidelity Go, which serves as an introduction to their greater suite of services. The digital product is aimed at young investors, with no fees for accounts under $10,000 and access to the firm’s planning tools. Fidelity clients can link all their accounts together through the Go platform and invest in Fidelity Flex mutual funds. 

Best For: Existing Fidelity customers and first-time investors with minimal assets.

Charles Schwab Intelligent Portfolios

AUM: $609.9 Billion

Account Minimum: $5,000

Fees: No trade commission fee, Exchange Traded Funds (ETF) average 0.08-0.15% management fees.

Summary: The robo advisory offering from Charles Schwab offers an initial $0 management fee, but requires a $5,000 minimum investment. Their service automatically sets up a portfolio chosen out of 53 ETFs across 20 asset classes, including commodities. When clients reach an investment level of $25,000, they can upgrade to a premium plan for $300 and a monthly $30 fee, that includes one-on-one guidance from a certified financial planner. 

Best For: Low fees at the introductory level, or for HNWIs looking to combine automated and one-on-one service.

Vanguard Digital Advisor

AUM: $276.5 Billion

Account Minimum: $3,000 ($5 for eligible defined contribution plan participants)

Fees: 0.15% – 0.20%

Summary: A newly launched offering separate from Vanguard Personal Advisors, this digital advisory service is designed to be easily accessible for new investors. It accomplishes this goal through low minimum balance requirements, intuitive step-by-step instructions for opening a new account, and minimal net advisory fees. The debt payoff calculator is a unique feature that allows users to aggregate all their loans within the account and suggests strategies for becoming debt-free as efficiently as possible. 

Best For: New investors and/or those making the leap to fully automated services.

Ally Invest Advisors

AUM: $709.8 Million

Account Minimum: $0 to open, $100 to invest

Fees: 0.30% of assets for low cash allocations, no advisory fees for portfolios with 30% cash

Summary: Through its digital arm, Ally offers two types of managed portfolios. Clients can hold either Cash Enhanced portfolios of at least 30 percent cash and ear interest, or Market Focused portfolios, with a very small cash allocation and a 0.30 percent management fee. This offers newer investors the ability to “upgrade” from the former account to the latter and removes barriers from building wealth. Another standout feature from this tech-forward firm is 24/7 customer support via telephone, Twitter and Facebook Messenger. 

Best For: Existing Ally customers and those with an eye towards retirement

Interactive Financial Advisors

AUM: $279.9 Million

Account Minimum: $100 – $50000 depending on portfolio

Fees: 0.08-1.5% per year, depending on advisor and portfolio chosen

Summary: For those looking to invest sustainably, Interactive will stand out as a top choice due its focus on socially responsible products and pre-built portfolios invested with Environmental, Social and Governance (ESG) factors in mind. The nearly 90 portfolio choices available to clients are sortable by  themes like “Better Planet,” “Social Justice” and “Undervalued Companies”. Users can also choose to exclude single stocks or blocks of companies that don’t align with their values from their investments. Interactives Impact Dashboard feature also lets its clients visualize their portfolio with a letter grade denoting how well their investment agins with their values. 

Best For: Socially conscious investors and portfolio construction

Merril Guided Investing

AUM: $1.1 Trillion

Account Minimum: $1,000

Fees: 0.45% annually, of assets under management, assessed monthly

Summary: One of the biggest of the big unsurprisingly does an excellent job when it comes to educating consumers along their financial journey. Their Investor Education Hub allows each user to select a path based on their experience and interests, and subsequently provides financial education content aligned to their sophistication level, topic, product and delivery preference. Those with a pre-existing relationship to Merrill Edge and/or Bank of America can qualify as preferred rewards members and receive discounts on fees between 0.05-0.15% depending on program level. 

Best For: Those looking to learn more about and take the reigns of their financial journey

Is Automated Investing and Robo Advisors Right for Me?

Despite its popularity, automated investing and robo advisors are not one-size-fits-all solutions. As you can see based on the options laid out above, different providers will serve as the best match for different people, depending on their unique financial circumstances. Here are a few questions to ask yourself before selecting or moving your investment to an automated advisor: 

  • How important is it to me that I have access to a human advisor? – Some providers offer an option to reach out to a real person when needed, while others do not. Evaluate your ability to do independent research or solve problems on your own prior to going fully automated. 
  • What is my current financial education level and what, if any, are my areas of weakness? – You might be a wiz at playing the stock market, but be totally in the dark when it comes to planning for retirement. If possible, select a firm that allows you to play around financially within your areas of interest, but has strong education and goal-setting capabilities in spots you can’t manage strongly on your own. 
  • How do I feel about my current financial situation? – While many beginner-level advisory services do not require a minimum investment, it’s a good idea to ensure basic financial security before the relative roll of the dice that comes with investing. On the other hand, the average age of individual investors has gone down and it’s never too early to start thinking about your financial future! 
  • When it comes to investing, what are my overall risk tolerance, goals and preferences? – Robo advisors typically offer five to ten portfolio options, ranging from conservative to aggressive. Beyond the basic introductory survey, continually monitor your advisor of choice and make sure your wealth is grown as expected and the choices being made align with your wishes. 
  • What is my main goal and how do I get there? – This might not be a basic answer, but instead one with multiple layers that evolves over time. Automated advisors might be able to help you get where you want to go, but it’s also worth considering if and when you need to talk to a human certified financial advisor to reach the finish line.

Note: The information provided on this page is written by our staff and for educational purposes only. CodingBootcamps.io does not offer investing services or platforms, nor do we counsel readers to buy or sell specific stocks or securities.

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