Fidelity Robo Advisor: Investing Made Easy

Fidelity Robo Advisor is a game-changer for investors who want to make smart decisions without breaking the bank. With no management fees for accounts under $10,000, it's an attractive option for those just starting out.

Fidelity's low-cost approach is just the beginning. Their robo advisor offers a range of investment portfolios to suit different risk tolerances and goals, from conservative to aggressive.

By automating the investment process, Fidelity's robo advisor saves you time and effort, allowing you to focus on what really matters.

For another approach, see: Fidelity Taxable Brokerage Account

A robo-advisor is a type of investment management where a website uses algorithms to manage your money for you.

These websites typically ask you a series of questions about your goals, time horizon, and risk tolerance to match you with a portfolio.

You can expect to find at least five different risk options ranging from conservative to aggressive.

The robo-advisor will then automatically rebalance your portfolio to keep the allocations in line with the target levels over time.

This means you don't have to constantly monitor and adjust your investments, making it a convenient and hands-off option.

Broaden your view: Fidelity Portfolio Managers

A robo advisor works by using information about you to suggest an investment strategy and create a portfolio that aligns with it. This typically starts with an online or app-based questionnaire about your financial situation, goals, and risk tolerance.

You'll be asked about your investment goals and when you need the money, as well as your comfort level with market ups and downs. A robo advisor uses this information to suggest a mix of investments to support your goals.

The robo advisor will then keep an eye on your account and rebalance it as needed to keep you on track over time. This often involves automatically buying and selling investments to maintain your desired asset allocation.

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Most robo advisors use different pieces of information about an investor to suggest an investment strategy.

You'll first be asked questions about yourself, your current financial situation, and your goals, or what you're investing for and when you need the money.

A robo advisor uses this information to suggest a mix of different types of investments to help support your goals and objectives.

It keeps an eye on things for you and typically rebalances your account by automatically buying and selling investments.

This helps keep you on track over time, ensuring your portfolio aligns with your investment strategy.

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Fidelity Go's account setup process is surprisingly straightforward. It starts with a guided onboarding process that helps you get started.

You'll be prompted to select a savings goal, either retirement or something else. This will determine the type of investment account you'll open.

The sign-up process is short and sweet, asking a series of questions about your investment timeline, risk tolerance, and personal financial data.

You'll then be presented with a proposed portfolio that best matches your information. You can also opt to select a different portfolio risk level if you prefer.

Fidelity Go offers a limited number of investment account options, including taxable accounts, traditional IRAs, Roth IRAs, rollover IRAs, and health savings accounts (HSAs).

There's no minimum deposit needed to open your account, although you'll need to deposit at least $10 before your funds will be invested.

The deposit process is also streamlined, with a decisioning tool that helps you balance contributions to multiple accounts and stay on track to reach your goals.

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A robo advisor like Fidelity Go offers a range of benefits that make investing easy and accessible.

A key benefit is that it provides low-cost professional money management, making it a great option for those who want to invest without breaking the bank. Fidelity Go's low management fee and no-fee funds are particularly attractive features.

Investors who use a robo advisor can also expect to benefit from automatic rebalancing, which helps to ensure that their portfolio stays on track and aligned with their investment goals. This feature can be a big time-saver for those who don't have the time or expertise to manage their investments manually.

Some key features of Fidelity Go include:

These features make it easy to get started with investing and to manage your portfolio over time.

To start investing with a robo advisor, research options to find a service that matches your financial goals and preferences. Compare advisory fees, investment minimums, and investment types available to you.

Not all robo advisory services are alike, and some may not be the right fit for every investor. You'll be asked to open an account or convert an existing one and transfer funds into it to begin investing.

You'll be asked about your goals, risk tolerance, and financial situation to help create your investment strategy. This will guide the robo advisor in making investment decisions for you.

Fidelity Go allows you to set up savings goals when you create your account, with options centered around retirement, large purchases, and general investing.

Easy investing with automation is a game-changer for those looking to get started with investing without breaking the bank. A robo-advisor can help manage some of the risk that comes with investing by diversifying your portfolio, monitoring and analyzing the markets, and automatically rebalancing your investments when needed.

A robo-advisor is a great option for investors who are just starting out and want a little guidance with their investing. In fact, the median age of robo-advisor users is often higher than expected, with many investors in their late 40s and early 50s taking advantage of these services.

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To get started with a robo-advisor, you'll need to research options and find a service that matches your financial goals and preferences. Compare advisory fees, investment minimums, and investment types available to you, and understand what level of financial guidance you can expect.

Some popular robo-advisors, like Fidelity Go, offer low-cost professional money management and easy account opening. With Fidelity Go, you can view and adjust your portfolio risk before account funding, and existing Fidelity customers can seamlessly interact with the platform.

Here are some pros and cons of using a robo-advisor like Fidelity Go:

Ultimately, a robo-advisor can be a great option for investors who want to save for something 3 or more years away, are willing to pay a fee for someone to make investment decisions, and want to access their account online to track their investments.

Fidelity Go's portfolio management strategy is centered around rebalancing, which helps keep your investments aligned with your desired risk level. This is done automatically by Fidelity Go, without the need for you to manually request a rebalance.

Rebalancing is triggered when the investment allocation drifts outside certain parameters, and your money is reallocated back to the initial portfolio risk level. You can adjust your portfolio risk level at any time, but there's no option to request a rebalance.

Fidelity Go also offers tax optimization, which places tax-advantaged funds like municipal bonds in taxable accounts to help enhance your tax situation over time. However, tax-loss harvesting is not available through Fidelity Go.

Account services are an essential part of managing your portfolio, and Fidelity Go offers a range of features to help you achieve your investment goals.

Fidelity Go's focus is on helping you save for common, straightforward goals, such as retirement or a home. The platform includes a decisioning tool that helps you balance contributions to multiple accounts and stay on track to reach your goals.

You can automatically invest your deposits based on the portfolio best aligned with your timeline without placing individual trades or timing the market. This is especially useful if you're new to investing or want to simplify your portfolio management process.

Fidelity Go's platform is geared towards a streamlined portfolio and planning solution, which means you won't find features like margin, loan, credit, spend, or banking options. However, these features are available through other platforms within Fidelity.

To help you visualize the account services offered by Fidelity Go, here's a brief summary of the key features:

Overall, Fidelity Go's account services are designed to make it easy to manage your portfolio and achieve your investment goals.

Cash management is a crucial aspect of portfolio management, and Fidelity Go offers a cash management option that's worth exploring. Cash that's not invested in your account is automatically swept into the Fidelity Government Cash Reserves fund, which currently yields 4.04%.

This option has the potential to offer a higher return compared to being swept into a bank deposit account. I've seen firsthand how this can add up over time, making a significant difference in one's overall investment strategy.

The Fidelity Rewards Visa Signature card is also available to all Fidelity users, offering 2.0% cashback rewards. This can be a great way to earn rewards on your daily purchases, but it's worth noting that this card isn't uniquely integrated with Fidelity Go.

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A robo advisor like Fidelity Go can help manage risk by diversifying your portfolio, monitoring and analyzing markets, and automatically rebalancing your investments. This can be especially helpful for new investors who may not have the time or expertise to research and make decisions themselves.

Fidelity Go uses a passive portfolio strategy that attempts to match overall market growth adjusted for your investment risk preference. This approach is a solid starting point, but it may not be suitable for investors seeking a more socially conscious option.

One of the key features of Fidelity Go is automatic rebalancing, which is triggered when the investment allocation drifts outside certain parameters. This helps ensure that your portfolio stays within its desired risk level.

Tax optimization is also an important component of Fidelity Go's portfolio management strategy. While it doesn't offer tax-loss harvesting, it does place tax-advantaged funds in taxable accounts to enhance your tax situation over time.

Fidelity Go also provides regular updates on your goal progress, so you can stay on track as your situation changes. You can also link external investment accounts for a more holistic view of your financial situation.

Here are some key portfolio management features of Fidelity Go:

Schwab Intelligent Portfolios, on the other hand, offers automatic rebalancing and tax-loss harvesting, but only for accounts with at least $50,000 in assets. It also offers a premium tier with unlimited access to financial advisors for a one-time planning fee of $300 and $30 per month after that.

Betterment has partnered with Goldman Sachs to bring tax-efficient bond portfolios to retail investors.

These portfolios are designed to help investors minimize their tax liability.

They will be available to Betterment's individual investors and soon to financial advisors who custody client assets at Betterment.

The new fixed-income portfolios are a significant development in portfolio management.

They offer a more sophisticated investment option for those looking to optimize their returns.

For those who custody client assets at Betterment, these portfolios will be available soon.

This means financial advisors can offer their clients a more comprehensive investment solution.

Fidelity robo advisor fees are generally lower than traditional wealth manager fees.

You won't pay an advisory fee on accounts with balances less than $25,000, making it a great option for beginners.

The median advisory fee for robo-advisors is 25 basis points, while traditional wealth managers often charge 1.0%, 1.5%, or 2.0% of assets under management.

Fidelity Go charges a flat annual fee of 0.35% on accounts with more than $25,000, which is competitive compared to other robo-advisors.

Fidelity Go uses Fidelity Flex Funds, which have no management fee or expense ratio, making it a more cost-effective option.

Here's a breakdown of Fidelity Go's fees: