Here’s the Robo-Advisor That These Personal Finance Experts Swear By – NextAdvisor

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If decision fatigue is keeping you from investing, maybe it’s time to let the robots take over. 

Our investing experts say that automated investing softwares—also known as robo-advisors—are a good tool for beginners and advanced investors alike. And according to our recent survey, they’ve got a clear favorite. 

Robo-advisors use information like your age, when you want to retire, and your risk tolerance to make investing decisions on your behalf. Some even offer access to traditional IRAs, Roth IRAs, rollover IRAs, and SEP IRAs, which are tax-advantaged retirement accounts. The fees they charge are higher than what you’d pay if you invested on your own through a low-cost brokerage; but they’ll be lower than what you’d pay for human guidance. 

Today, about 8% of U.S. households use robo-advisors to invest, according to research by the data and analytics firm Hearts & Wallets.

Here’s why you might want to consider a robo-advisor, what features and fees to watch out for, and which service our experts chose as their favorite. 

What Are Robo-Advisors?

Robo-advisors are investing platforms that use software to determine your investment portfolio. The software asks you for personal investing information and then creates a portfolio based on your answers. Your investments are automated and run by the robo-advisor’s software. They usually have relatively low fees, friendly interfaces, and require little work on your part. Robo-advisors are typically safe, especially when you have a long-term investing horizon, and have grown in popularity due to their convenience.

Pro Tip

For most robo-advisors, you can override the initial decisions they make for you. For instance, if your questionnaire showed that you’re a more conservative investor, you can change up your preferences to be riskier.

What to Look for In a Robo-Advisor, According to the Experts

1. Flexibility

Julien Saunders

Co-creator of rich & REGULAR, a husband and wife-run online finance community

Julien Saunders and his wife Kiersten both use Betterment—the first and now one of the largest robo-advisers—because of its flexibility, specifically in its portfolio design. “What we appreciate the most is the flexibility you can build on the platform,” Saunders says. 

Betterment gives users the option to adopt pre-selected …….


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