Robo-advisers, those automated investment services offered by banks, brokerages and other financial firms, promise low-cost, computer-driven investment management geared to your goals. I
Although $1,000 is not enough to get started at Charles Schwab (it’s a heavy-weight competitor in robos, but its Intelligent Portfolio service requires $5,000 to open an account), it’s plenty for SoFi.
The fintech company’s digital advice service, called SoFi Invest, has a $1 minimum and no annual management fee. What’s more, SoFi’s digital service wins top marks as the best robo-adviser for first-time investors from the Robo Report, a quarterly publication from Condor Capital, a Martinsville, N.J.-based advisory firm, that measures the performance, among other things, of robo-adviser services.
SoFi’s program is similar to other robo services. You answer a quick online survey that touches (lightly) on your goal, financial situation and risk tolerance. Then an algorithm spits out a recommended diversified portfolio for you that holds a smattering of exchange-traded funds that are appropriate to your investment timeline.
SoFi competitor Wealthfront has a $500 entry minimum and charges 0.25% in annual management fees. Wealthfront’s robo portfolios have performed better than peers in recent years, according to the Robo Report, thanks in part to a 10% allocation to energy stocks, the best-performing sector in the U.S. stock market over the past two years.
At Fidelity, the price of entry and costs are low in the beginning for its Fidelity Go digital advisory service — there’s no minimum to open an account and no advisory fees for accounts with balances under $25,000.
That’s in part why the Robo Report names Fidelity Go as the best robo-adviser overall. Once balances exceed certain levels, annual fees apply; for balances above $25,000, it's a 0.35% advisory fee. But Robo Report also like Fidelity Go for its additional features, including live operational support and licensed advisers, as well as retirement planning features.
