Robo-Advisors for Automatic Investing

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Investing may seem complicated at first glance, but no one needs an expensive investment professional to get started. Robo-advisors make investing accessible to everyone, and their low fees and low or no minimum balances mean you can begin with only a few dollars.

At its core, a robo-advisor is an online, automated portfolio management service. They are much cheaper than traditional, human advisors because they run on computer algorithms to manage investments. These lower costs can lead to higher returns for investors.

Here are some of the most popular robo-advisors right now:

Advisors Min Investment Fees
$0Min Investment 0.15-0.35%Fees
$25,000Min Investment 0.49-0.89%Fees
$5Min Investment $1/month up to $5,000; 0.25% annually after $5,000Fees
$500Min Investment 0-0.25%Fees
$0Min Investment $1/month up to $5,000; 0.25% annually after $5,000Fees
$100Min Investment 0.35%Fees
$0Min Investment 0-0.50%Fees
$0Min Investment 0%*Fees
$0Min Investment 0.3-0.75%Fees
$0Min Investment 0.50%Fees

Most robo-advisors will charge a small fee to manage investments, but these fees are more cost effective generally than human advisors. Some robo-advisors will even reduce their fee as your portfolio grows, so the more you invest, the lower your fee percentage becomes. Others will apply no fee on an initial balance and only begin charging after the portfolio reaches a certain level, which can be great for people just getting started with investing. Similarly, most robo-advisors have small or $0 minimum opening balances, so any new investors can begin with a small monetary commitment.

Most portfolios you'll hold with a robo-advisor will include funds (collections of similar stocks and bonds). This helps your portfolio stay diversified and track the entire stock market, instead of the performance of only a few companies. Some robo-advisors do let you customize a portfolio based on certain criteria, such as reaching a minimum portfolio size, but the recommended funds are a great place to start and may be sufficient for most investors.

With all that said, how does a robo-advisor actually manage your money? Well, after you link up a bank account and make whatever portfolio selections are available, the platform will automatically invest your money into its selected funds, rebalance the investments as needed over time, track activity so it's easy to include in your tax returns, and even more. They will automatically deposit money for you after each paycheck, if you'd like, let you know how close you are to meeting goals, and provide plenty of helpful suggestions on how to develop your personal finance knowledge.

There are plenty of benefits to robo-advisors, whether you're a newer investor starting out, someone who doesn't want to spend much time managing investments, or someone who wants a simple yet well-diversified portfolio without huge fees. While they may not suit people with complex financial situations or highly specific investing goals, for most investors looking to increase returns and lower costs, robo-advisors make a good match.