NerdsWallet Robo Advisors: A Guide to Choosing the Best

NerdsWallet offers a range of robo advisors, with fees starting at 0.25% of your investment balance.

Robo advisors can be a great way to invest in the stock market, especially for beginners. They're often low-cost and easy to use.

Some NerdsWallet robo advisors offer tax-loss harvesting, which can help you save money on taxes. This feature allows you to sell securities that have declined in value and use the losses to offset gains from other investments.

Investing with a robo advisor can be a straightforward process, with many platforms allowing you to set up a portfolio in just a few minutes.

Robo-advisors are automated investing services that use computer algorithms to build and manage your investment portfolio. They typically require little to no human interaction, but many providers have advisors available for questions.

One of the key benefits of robo-advisors is that they often have low or no minimum balance requirements, making it easier to get started with investing. Traditional portfolio management services often require high balances.

Robo-advisors can automatically rebalance and optimize your portfolio for taxes, which can be a huge time-saver. They also offer low costs, allowing you to invest quickly and efficiently.

You can get started with a robo-advisor in just a matter of minutes, making it a great option for those who are new to investing.

Robo-advisors are a great option for those who want to invest for financial goals like retirement, but don't need a complete financial plan. They're low-cost, with some having no or low management fees, and many services have no or low account minimums.

You can start investing with any amount of money, making them a great choice for those with small portfolios.

Robo-advisors excel at simple investment management, but if you need more rigorous financial planning, you may want to look elsewhere.

Here's a breakdown of the cost levels you're likely to encounter with robo-advisors:

When considering whether a robo-advisor is worth it, take into account the following.

They can be a cost-effective option, with fees often significantly lower than traditional financial advisors. Many robo-advisors charge a management fee of 0.25% or less of your investment portfolio.

Some robo-advisors offer a wide range of investment portfolios to choose from, making it easy to find one that aligns with your financial goals and risk tolerance. This can be especially helpful for beginners who may not know where to start.

Robo-advisors also provide access to professional investment management and monitoring, which can be a valuable resource for those who want to invest but don't have the time or expertise to do it themselves. This can give you peace of mind and help you stay on track with your financial goals.

Ultimately, the decision to use a robo-advisor depends on your individual financial situation and needs.

To find the right robo-advisor, you need to know what you're hoping to get out of the relationship. Financial advisors provide a wide range of services, so it's a good idea to know what you need help with before you begin your search.

Some advisors may provide holistic help, guiding you on everything from savings goals and budgeting to retirement and estate planning. Other advisors might be specialists, meaning they have certifications or expertise in a particular area of finance.

Here are some common areas where financial advisors can help:

If you need help with everything, a holistic planner might be a good fit.

Robo-advisors are generally much cheaper than traditional financial advisors, with fees ranging from 0.25% to 0.50% of your account balance per year. This can add up to just $25 a year for a $10,000 account balance.

Some robo-advisors have no account minimums, while others require an initial investment of $5,000 or more. It's essential to understand these costs before committing to a service.

Traditional financial advisors can charge a median fee of 1%, although this can vary depending on the size of your account.

If you're on a tight budget, a robo-advisor might be a more affordable option. However, if you have a complicated financial situation, you may need more personalized guidance from a traditional advisor.

Here's a rough estimate of the costs you can expect from different types of advisors:

Keep in mind that these are just rough estimates, and the actual cost will depend on your specific situation and the advisor you choose.

There are several types of financial advisors to consider. A fee-only financial planner is paid directly by clients and acts as a fiduciary, meaning they put their clients' interests first.

Their fee structure can vary, but it's often a flat fee, hourly rate, or a percentage of assets under management, typically around 1% of a client's portfolio value each year. You can ask if your financial planner is a registered investment advisor or a certified financial planner, both of which are fiduciaries.

If you're looking for a more digital approach, robo-advisors can be a good option. They offer simplified, low-cost investment management and can be a good fit if you need help investing for financial goals like retirement but don't want or can't afford a complete financial plan.

Online planning services, also known as online financial advisors, are a hybrid of robo-advisors and traditional advisors. They offer unlimited access to a team of financial planners, but you'll meet virtually rather than in person. This model provides human oversight and interaction at a higher cost than a robo-advisor but at a lower cost than a traditional financial advisor.

Here's a brief comparison of some online planning services:

Traditional financial advisors can meet with you in person and provide specialized services for your financial planning needs. This can be especially helpful if your situation is complex or you want to develop a long-term relationship with your advisor.

They often charge high fees, typically around 1% of your assets under management. Some advisors also require a high minimum balance, such as $250,000 in assets.

If you want similar services for less or are comfortable getting help online, you may want to consider other options. Traditional financial advisors are a good fit if you value in-person meetings and a long-term relationship with your advisor.

A fee-only financial planner is a great option to consider when looking for a financial advisor. They are paid directly by clients for their services, either through a flat fee, hourly rate, or a percentage of assets under management, typically around 1% of a client's portfolio value each year.

This pay structure is important because it means they don't receive commissions or other payments from financial product providers. As a result, they are obligated to act as a "fiduciary", putting their clients' interests first.

To ensure your financial planner is a fiduciary, ask if they are a registered investment advisor or a certified financial planner. Both types are fiduciaries, and it's crucial to consider this when choosing an advisor.

Here are some examples of what you can expect from a fee-only financial planner:

Keep in mind that the cost of a fee-only financial planner can vary, but it's essential to understand their fee structure before committing to their services.

Robo Advisor Services are a great option for those looking to invest with minimal effort and cost. You can start with any amount of money, thanks to no or low account minimums.

Some robo-advisors have no or low management fees, making them an attractive choice for those on a budget. For example, some services have no management fees at all.

Robo-advisors are ideal for investors who need help reaching financial goals like retirement, but don't want or can't afford a complete financial plan. They're perfect for those who want to invest with ease.

However, if you need more rigorous financial planning, a robo-advisor might not be the best choice. Most excel at simple investment management, so if you need more complex planning, you might want to look elsewhere.

Here are some popular robo-advisors to consider:

These hybrid services offer a combination of human oversight and digital investment management, making them a great option for those who want the best of both worlds.

So, you're considering a robo advisor, but you're not sure which one to choose. First, let's talk about cost. Robo advisors often charge an annual fee that's a percentage of your account balance, typically starting at 0.25% of the assets they manage for you.

Some popular robo advisors charge fees as low as $125 a year on a $50,000 account balance. This is a great option for those with smaller portfolios who want to save money.

If you have a more complicated financial situation, you may need a more comprehensive financial planning service. Online financial planning services can offer portfolio management and financial planning for a flat subscription fee or a percentage of your assets.

These services can be a good middle ground between a robo advisor and a traditional financial advisor. For example, Empower charges 0.49% to 0.89% of assets under management per year.

Here are some popular robo advisors and their typical fees:

Ultimately, the right robo advisor for you will depend on your budget, assets, and financial goals. If you want to be a hands-on investor, a robo advisor might not be the best choice. But if you want a hands-off approach, a robo advisor could be a solid option.