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Best Robo-Advisors 2018: A Guide for an Easy Choice

Robo-Advisor

Do you want to invest in an effortlessly way? Use one of the best robo-advisors on the market and start investing on autopilot today.

Table of contents

  • What is a robo-advisor?
  • Best robo-advisor for US investors
  • Best robo-advisor for non-US investors
  • Best robo-advisor for 401k
  • Best for socially responsible investing
  • Best robo-advisor for low fees

What is a robo-advisor?

Robo-advisors are a type of online financial advisor, that automatically manages your investments with minimal human intervention.

They do so, by simply investing your money based on your risk preferences and your desired time horizon.

Furthermore, robo-advisors can help you automate your investing, by rebalancing your investment portfolio, doing tax-efficient investing and more.

By using a robo-advisor instead of a real human advisor, you practically cut out the middleman.

So in contrast to human advisors, you won’t experience sky-high fees, if you choose one of the best robo-advisors on the market.

And as a result of paying less in fees, your overall investment returns will increase.

But doesn’t it lower my return not to use a human advisor? The short answer is no.

Numerous studies show that human advisors statistically is a bad idea as people are prone to bad decision making. Especially in finance.

Opposed to human advisors, robo-advisors aren’t prone to bad decision making.

Consequently, this makes robo-advisors an ideal way of investing.

But which robo-advisor is best for you? We have collected the best robo-advisors of their respective categories to give you an easy overview.

Best robo-advisor for US investors

The overall best robo-advisor for US investors is Betterment. They charge a low annual fee of 0.25-0.40% depending on the account size.

To put a cherry on top of the ice cream, the first year is free of charge.

Betterment doesn’t have an account minimum requirement. As a result, you can start investing with just a few bucks!

One of the only downsides of Betterment is that it’s only available for investors in the United States. But if you live in the US, Betterment is a magnificent choice of robo-advisor.

Best robo-advisor for non-US investors

If you don’t live in the US, you still have access to some of the very best robo-advisors in the world. So picking an excellent robo-advisor is no problem. We found the best robo-advisor for non-US investors to be Wealthsimple.

The robo-advisor was founded in 2014 and is well established on the market. They charge a 0.40-0.50% management fee depending on your account size.

Besides that, their service doesn’t have an account minimum. So it’s easy to dip your toes into the investment world without having loads of money.

Finally, Wealthsimple’s user-friendliness makes it one of the most attractive robo-advisors on the market.

As a result, Wealthsimple is probably the best robo-advisor in Canada, the United Kingdom, and Europe. Their service does also include the United States.

Best robo-advisor for 401(k)

The best robo-advisor for 401(k) is Blooom. As the first on the market, they offer a robo-advisor for 401(k) management.

They charge a monthly flat fee of 10 dollars. As a result of that, the more you invest, the less your cost will be as a percentage.

Blooom is, due to the nature of their product, only available for investors in the US.

Best for socially responsible investing

If you want to invest, but prefer not to invest in assets that damage the world, you have the possibility to invest in a socially responsible way.

This way you can sleep well at night knowing that your investments are aligned with your own values.

If you want to invest in a socially responsible way, Wealthsimple does a fantastic job of providing you with such options.

Maybe their management fees at 0.40%-0.50% is a tiny bit higher than some of the cheapest. But with peace in mind, while growing your wealth can make it well worth it.

Best robo-advisor for low fees

WiseBanyan is a robo-advisor with 0% management fee and an account minimum of 0.

If it sounds too good to be true, it might be.

Because the 0% management fee is only for their base product.

The robo-advisor charges extra fees for services like tax-loss harvesting etc, which typically is included in other robo-advisors.

Overall, the robo-advisor is fine, but with a 0% management fee, you are really going to miss some of the benefits the other platforms provide. Or you can pay extra for it using WiseBanyan.

WiseBanyan is available for investors in the United States.