When you begin to think about investing, all of the details can seem extremely daunting. And just this one fact alone is enough to keep a lot of people from even embarking upon the journey of investing. But, what if the initial investing journey could be much simpler? It actually can be. This is where robo-advisors come into play. In fact, it’s actually how I got started investing again after my divorce. I didn’t have the time or energy to try and figure everything out. Robo-advisors made it pain-free and had really low fees to boot. So, I’ve put together a list of 6 of the best robo-advisors to begin investing online with to help get you started.
I’ve used Acorns for a little while now and still really like it as an investment supplement. Acorns is extremely easy to use and I love that they have round up possibilities. If you start out with the base account then it’s only $1 per month as a recurring fee. The account you will have is a taxable investment account.
You do not get to pick and choose specific stocks or mutual funds with Acorns, like most of these robo-advisors. But, they will run you through a series of questions upon account activation in order to determine which type of account mix to put you in. And you can always change how aggressive your approach whenever you like on their platform.
There is no minimal deposit to get started, which I really liked. You can set up a recurring monthly deposit to keep yourself rolling and/or deposit funds into your Acorns account whenever you like. The round up feature is helpful for those of us who have a more difficult time saving, as it rounds up to the nearest dollar each purchase and then puts that amount into your investment account. You can also add a multiplier to multiply that round up for each purchase if you want to start getting more aggressive but not necessarily feel it as much. This is one platform that I really like for overall ease and diversity.
Betterment is another online robo-advisor I really love. They were actually who I started investing with after I got divorced to restart my retirement future. They operate similarly to Acorns in respect to setting up your account mixes. You can also change how aggressive you invest on their platform, but you cannot pick individual stocks or mutual funds.
Their fees are extremely low and they do all of the rebalancing for you, which is a fantastic feature. There is also no minimum balance to open an account with them and you can deposit money however and whenever you’d like. I do like that they give you the ability to open a few different accounts, however. I had a Roth IRA and a Traditional IRA (rolled over from a previous 401k) in my Betterment portfolio.
Recently, though, I got to the point where I wanted to be a more active investor. Since they don’t offer the capability to pick my own funds, I ultimately moved all of my money over to my Fidelity account instead.
Warning For The Future
A word of warning (that I was completely unaware of) is that most of these robo-advisors don’t participate in the larger ETF system that the bigger investment firms do. This is due to cost since there is an annual fee to participate. While I understand that, but what it means is that they will send physical checks as opposed to wire transfers. So this takes a lot more time and more time your money isn’t in the market.
So for me, when I needed to switch all of my accounts, Betterment sent a snail mail check for each account (one of which got lost in the ether for a month and a half and had to be reissued). This meant that my largest account wasn’t doing anything on the market for almost 2 months. So I lost a huge amount of potential market returns.
I still love them as a robo-advisor, but this is something to keep in the back of your mind should you ever decide to roll these accounts into another firm.
3. M1 Finance
M1 Finance is another one of the best robo-advisors for their diversity and functionality alone. They do have a $100 initial deposit to get started, which isn’t exorbitantly high. You can handle everything via their portal online or through an app on your phone. They have the initial intake to help you figure out which mix works best for you, just like the other robo-advisors. However, they are a bit different in that you also have the ability to purchase over 6,000 individual stocks or EFT’s.
This means you have more ability to customize your investments than other robo-advisors. So you can choose one of their pre-chosen account mixes based on your investing style and goals or individual funds. Plus, there are no annual fees either.
Robinhood is similar to all of the other robo-advisors. They give you the ability to embark on zero interest trading and get started with no minimum investment. You can manage your portfolio from your desktop or phone for added versatility.
They are big into the learning genre, as they want to help teach you to be a smarter investor. So, as you begin investing, you will learn tips and tricks from them to help you better understand the market and how it works. Plus, when you sign up they will give you your first stock for free. I really like this about Robinhood!
With SoFi, you can open an account with as little as $100. They have more of a hybrid model than the other robo-advisors do though. As a SoFi client, you will have free access to their financial planners to help you make the best choices for your situation. But, their platform is still in the robo-advisor category, which means less management for you. So, you get the ability to speak with their financial planners to work out your plan before you invest. Then the platform handles the rest for you.
You also get free rebalancing and much lower rates on any of their SoFi loans, should you ever be in the market for one. They just recently began offering partial stock and EFT share purchases for added diversity within their platform, And, if you open a checking account with them they will give you free money towards more stock purchases.
With Stash you can start investing with as little as $5. Which is basically no minimum to get started. There is a $1 monthly fee, which is pretty darn nominal in the grand scheme of things. Their platform can be managed from your desktop or your phone, which is great for those of us constantly on the move.
What’s really cool about Stash is that you can buy partial shares of stocks and EFT’s. They also have a debit card you can use to earn extra shares in stocks. Which is really awesome!
These are some awesome robo-advisors to help get you started on your investing journey! Click To Tweet
Best Robo-Advisors Summary
Ultimately, not every robo-advisor is going to be the right fit for everyone. So, the first step is to research all of the different options and see which ones might fit your investing style best. To get started, check out:
- M1 Finance
Once you have chosen the best fit, then it’s time to pull the trigger. After all, there is no time like the present to plan for your future.
Which robo-advisors have you tried and why or why not did you like them for investing?