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How much do I have to invest to use a robo advisor?

How much do I have to invest to use a robo advisor?
Asked by
Benjamin Schmitz categorie-icon time-icon6 months ago
1 Answer Answer Question

Sheila Olson
Answered time-icon6 months ago

Robo advisors work well for just about every class of investor. You get professional investment management and advice with an extremely low expense level, generally a fraction of a percent of your portfolio. Even better, there is a robo advisor platform for people just starting out and with very little cash to invest. Here’s a look at some of the most popular ones and their account minimums.

Betterment

Betterment has no minimum investment to open an account and no minimum monthly deposits. There are no annual account fees, transfer fees, or fees to close your account. Management fees are 0.25% and you get 12 months free management with a qualifying deposit. There’s also a premium option at 0.40% with unlimited phone access to a certified financial planner, but you need a $100,000 account balance to qualify for the premium option. All Betterment customers have unlimited in-app messaging with a financial advisor, however.

Wealthfront

Wealthfront and Betterment are the two major players in the robo advisor market. Wealthfront requires $500 to open an account, but it charges the same low 0.25% management fee as Betterment. Wealthfront has a no-fee option via Path, its free financial planning tool; you link your bank and retirement accounts and Path helps you put together an investment and retirement plan. Wealthfront has no option for advice from a live financial advisor, but they get bonus points for their low-cost, no-credit-check loan program where you can borrow up to 30% of your account balance.

SoFi

SoFi is totally free—no management fees, no account maintenance fees, no transfer fees. You need $100 to open an account at a minimum recurring monthly deposit of $20. SoFi is designed for beginning investors and they offer unlimited phone access to certified financial planners at no charge. SoFi operates like a personal financial coach; in addition to financial planning, they offer career coaching, high-interest savings accounts, low-interest loans, and they’ll even help you refinance your student loans. On the downside, at this time, they only offer taxable accounts, so don’t try to set up an IRA or 529 account here.

Charles Schwab Intelligent Portfolios

Charles Schwab charges no advisory or management fees for its robo advisory service and you get 24/7 access to Schwab certified financial planners, which is a great perk. However, you need $5,000 to open an account and your ETFs will all be Schwab family funds. In addition, all portfolios include a cash component, which means a percentage of your account balance is cash on deposit with Schwab.

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