Friday, December 2, 2022

    The 5 best online financial advisors

    The 5 best online financial advisors

    Updated

    2022-10-28T18:30:51Z


    Insider’s experts choose the best products and services to help make smart decisions with your money (here’s how). In some cases, we receive a commission from our our partners, however, our opinions are our own. Terms apply to offers listed on this page.

    Online financial advisors are more accessible, and often cheaper, than human advisors who actively manage investment portfolios. They’re a good option for beginner investors and hands-off investors at any wealth level.

    Compare our picks for the best online financial advisors

    • SoFi Automated Investing

    • Betterment Investing

    • Wealthfront Investing

    • Ellevest

    • Blooom Automated Investing

    Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

    Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

    Editor’s rating

    4.65/5

    A five pointed star

    A five pointed star

    A five pointed star

    A five pointed star

    A five pointed star

    Editor’s rating

    4.7/5

    A five pointed star

    A five pointed star

    A five pointed star

    A five pointed star

    A five pointed star

    Editor’s rating

    4.2/5

    A five pointed star

    A five pointed star

    A five pointed star

    A five pointed star

    A five pointed star

    0.25% annually (charged monthly)

    Editor’s rating

    4.27/5

    A five pointed star

    A five pointed star

    A five pointed star

    A five pointed star

    A five pointed star

    $12 – $97 annually (charged monthly)

    Editor’s rating

    4.03/5

    A five pointed star

    A five pointed star

    A five pointed star

    A five pointed star

    A five pointed star

    With these so-called robo-advisors, you get automated investment management, a control center to track your finances, and access to human experts or sophisticated financial planning software to help answer questions and reach your goals.

    For this list, we didn’t consider companies that match clients and advisors for comprehensive financial planning services, such as Zoe Financial or Facet Wealth. Instead, we focused on tech-driven firms where you can access an automated and personalized portfolio and consult a professional for advice when you need it.

    Online financial advisors emphasize passive investing, so none of our winners allow you to buy or sell individual stocks in your account. Most of these platforms help you build a portfolio of stock and bond ETFs and alternative assets, such as crypto or real estate trusts.

    Best for low fees: SoFi Automated Investing

    SoFi SoFi Automated Investing

    SoFi SoFi Automated Investing

    Pros & Cons

    Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

    Check mark icon A check mark. It indicates a confirmation of your intended interaction.

    No account minimum or management fees to invest

    Check mark icon A check mark. It indicates a confirmation of your intended interaction.

    Goal planning and automatic portfolio rebalancing

    Check mark icon A check mark. It indicates a confirmation of your intended interaction.

    Range of other account options across SoFi website

    Check mark icon A check mark. It indicates a confirmation of your intended interaction.

    SoFi offers complimentary CFP access across all accounts

    Dash icon A dash. It often indicates an interaction to shrink a section.

    No tax-loss harvesting

    Dash icon A dash. It often indicates an interaction to shrink a section.

    No socially responsible portfolio options

    Highlights

    Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

    • Promotion: None at this time.
    • Consider it if: You’re new to investing and want to leave the trading decisions to professionals.

    Additional Reading

    Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

    Investment account types: Individual and joint taxable brokerage, traditional IRA, Roth IRA, and SEP IRA.

    What stands out: 

    • Zero advisory fees
    • Free one-on-one consultations with CFPs, a service that isn’t offered by some robo-advisors that charge an annual fee
    • Portfolios invest in both SoFi ETFs and non-SOFI ETFs
    • Account includes portfolio rebalancing and goal planning
    • Investors get to choose between five portfolios: moderate, moderately conservative, conservative, moderately aggressive, and aggressive
    • Additional SoFi membership perks include loan discounts and career counseling
    • 4.1/5 Google Play store rating
    • 4.8/5 Apple App store rating 

    What to look out for:  

    • No tax-loss harvesting
    • Portfolios, while broadly diversified, are limited to 10 options

    Read more: SoFi Automated Investing review

    Best for diversified investing: Betterment

    Betterment Betterment Investing


    Account Minimum

    $0 to open, $10 to start investing ($100,000 for premium plan)


    Fees

    0.25%/year for digital plan; 0.40%/ year for premium plan; 1%/year for crypto portfolios


    Investment Types

    ETFs and cryptocurrencies

    Betterment Betterment Investing


    Account Minimum

    $0 to open, $10 to start investing ($100,000 for premium plan)


    Fees

    0.25%/year for digital plan; 0.40%/ year for premium plan; 1%/year for crypto portfolios


    Investment Types

    ETFs and cryptocurrencies

    Details


    Account Minimum

    $0 to open, $10 to start investing ($100,000 for premium plan)


    Fees

    0.25%/year for digital plan; 0.40%/ year for premium plan; 1%/year for crypto portfolios

    Pros & Cons

    Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

    Check mark icon A check mark. It indicates a confirmation of your intended interaction.

    No minimum for standard investing account

    Check mark icon A check mark. It indicates a confirmation of your intended interaction.

    Goal-based planning, tax-loss harvesting, charitable giving, and socially responsible investing available

    Check mark icon A check mark. It indicates a confirmation of your intended interaction.

    Access to certified financial planners

    Check mark icon A check mark. It indicates a confirmation of your intended interaction.

    Mobile app with external account syncing options

    Dash icon A dash. It often indicates an interaction to shrink a section.

    You’ll have to pay to consult a human advisor, unless you have the premium plan

    Highlights

    Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

    • Promotion: None at this time.
    • App store rating: 4.7 iOS/4.5 Android
    • Consider it if: You want access to robo-advice with multiple service levels.

    Additional Reading

    Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

    Investment account types: Individual and joint taxable brokerage, traditional IRA, Roth IRA, SEP IRA, inherited IRA, and trust.

    What stands out: 

    • Premium plans come with unlimited access via phone and email to Betterment CFPs
    • Open an FDIC-insured cash account*
    • Invest in socially responsible portfolios; cryptocurrency portfolios available
    • Get free checking and cash reserve accounts (nice feature for recurring deposits into investments)
    • Use goal-setting, advice, and retirement planning tools
    • Link various accounts to clear and easy-to-use financial dashboard
    • Buy one-off financial advice packages at standard industry rates
    • Automatic rebalancing and tax-loss harvesting
    • 4.5/5 Google Play store rating
    • 4.7/5 Apple App store rating 

    *Cash Reserve is only available to clients of Betterment LLC, which is not a bank, and cash transfers to program banks are conducted through the clients’ brokerage accounts at Betterment Securities. Learn more.

    What to look out for:  

    • Accounts with a $100,000 balance can upgrade to get advisor access, but the annual fee increases from 0.25% (an industry low) to 0.40%

    Read more: Betterment review — fees, returns, investing services, and competitors

    Best for 529 plans: Wealthfront

    Wealthfront Wealthfront Investing


    Investment Types

    ETFs, index funds, and crypto trusts

    Wealthfront Wealthfront Investing


    Investment Types

    ETFs, index funds, and crypto trusts

    Pros & Cons

    Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

    Check mark icon A check mark. It indicates a confirmation of your intended interaction.

    Low annual fee for investment accounts; crypto trust investments available

    Check mark icon A check mark. It indicates a confirmation of your intended interaction.

    Tax-loss harvesting, portfolio lines of credit, 529 college savings plans available

    Check mark icon A check mark. It indicates a confirmation of your intended interaction.

    Cash account

    Check mark icon A check mark. It indicates a confirmation of your intended interaction.

    Mobile app and investing and retirement tools

    Dash icon A dash. It often indicates an interaction to shrink a section.

    You need at least $100,000 to utilize additional investment strategies

    Dash icon A dash. It often indicates an interaction to shrink a section.

    No human advisor access

    Highlights

    Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

    • Consider it if: You’re balancing several goals and want to streamline your finances.

    Additional Reading

    Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

    Investment account types: Individual and joint taxable brokerage, traditional IRA, Roth IRA, SEP IRA, trust, and 529 college savings plan.

    What stands out:  

    • Only top online advisor to offer 529 plans
    • Invest in cryptocurrency trusts
    • Borrow up to 30% of your investment balance at a low interest rate with a portfolio line of credit
    • Open an FDIC-insured bank account
    • Invest in socially responsible portfolios
    • Get personalized recommendations with smart financial planning software 
    • 4.5/5 Google Play app rating
    • 4.8/5 Apple App store rating

    What to look out for:  

    • On-staff financial advisors don’t offer personalized advice

    Read more: Wealthfront review — fees, returns, investing services, and competitors

    Best for financial planning and personal development: Ellevest

    Ellevest Ellevest


    Account Minimum

    $1 – $240


    Fees

    $54 – $97 annually; $5 or $9/month

    Ellevest Ellevest


    Account Minimum

    $1 – $240


    Fees

    $54 – $97 annually; $5 or $9/month

    Details


    Account Minimum

    $1 – $240


    Fees

    $54 – $97 annually; $5 or $9/month

    Pros & Cons

    Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

    Check mark icon A check mark. It indicates a confirmation of your intended interaction.

    Personalized, automated investment advice with a $0 minimum requirement

    Check mark icon A check mark. It indicates a confirmation of your intended interaction.

    Monthly plans include discounted access to certified financial planners

    Check mark icon A check mark. It indicates a confirmation of your intended interaction.

    Automated IRA accounts and 401(k)/403(b) rollovers available

    Check mark icon A check mark. It indicates a confirmation of your intended interaction.

    Private wealth management for individuals, families, and institutions who have at least $1 million to invest

    Dash icon A dash. It often indicates an interaction to shrink a section.

    No active trading opportunities available; money is mainly invested in stock ETFs and bond ETFs

    Dash icon A dash. It often indicates an interaction to shrink a section.

    You can only open individual investment accounts and retirement accounts; joint accounts or custodial accounts not available

    Dash icon A dash. It often indicates an interaction to shrink a section.

    No tax-loss harvesting

    Highlights

    Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

    • Promotion: None at this time.
    • Consider it if: You’re looking for a one-stop shop for financial planning.

    Additional Reading

    Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

    Investment account types: Individual taxable brokerage, traditional IRA, Roth IRA, and SEP IRA (all held at Folio Investments).

    What stands out: 

    • Get an investment strategy built around women’s unique needs and challenges
    • Access an extensive library of content and advisor-led workshops
    • Invest in socially responsible portfolios
    • Get monthly progress reports
    • 4.2/5 Google Play app rating
    • 4.7/5 Apple App store rating

    What to look out for: 

    • Financial coaching costs extra (but members get 30%-50% off)
    • Upgrade required for access to retirement account management

    Read more: Ellevest review —automated investing, plus access to financial planners

    Best for retirement accounts: Blooom

    Blooom Blooom Automated Investing

    Blooom Automated Investing


    Fees

    $120 – $295 annually


    Investment Types

    Index funds

    Blooom Blooom Automated Investing

    Blooom Automated Investing


    Fees

    $120 – $295 annually


    Investment Types

    Index funds

    Details


    Fees

    $120 – $295 annually

    Pros & Cons

    Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

    Check mark icon A check mark. It indicates a confirmation of your intended interaction.

    Automated and personalized management for 401(k)s and other employer-sponsored plans

    Check mark icon A check mark. It indicates a confirmation of your intended interaction.

    Free 401(k) or IRA analysis

    Check mark icon A check mark. It indicates a confirmation of your intended interaction.

    Human financial advisors available through Advisor Access and Financial Consulting pricing plans

    Dash icon A dash. It often indicates an interaction to shrink a section.

    Account management only available for employer-sponsored plans and IRAs

    Dash icon A dash. It often indicates an interaction to shrink a section.

    No phone customer support

    Highlights

    Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

    • Promotion: None at this time.
    • Consider it if: A large portion of your wealth is in one or more employer-sponsored retirement accounts.

    Additional Reading

    Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.

    Investment account types: 401(k), 401(a), 403(b), 457, Thrift Savings Plan, traditional IRA, Roth IRA, SEP IRA, nondeductible IRA, spousal IRA, Simple IRA, and self-directed IRA.

    What stands out:

    • Get specific and personalized fund recommendations that reduce fees in your 401(k) or other workplace retirement plan
    • Opt to have advisors place trades on your behalf
    • Email and instant chat with a financial advisor with the Advisor Access ($165 a year) and Financial Consulting ($295 a year) plans
    • Set up 1:1 calls with an advisor with the Financial Consulting plan
    • 4.4/5 iOS app rating

    What to look out for: 

    • No taxable brokerage accounts
    • No mobile app
    • You need a balance of at least $40,000 for your annual to fee to stay under 1% (the starting point for most human advisors)

    Read more: Blooom review — Automated management for 401(k)s, IRAs, and other employer-sponsored plans


    Other online financial advisors we considered

    • Vanguard Digital Advisor: : You can think of Vanguard Digital Advisor as Vanguard’s second robo-advisor offering. The difference between Vanguard Digital Advisor and Vanguard Personal Advisor Services comes down to fees and human advisor access. Though you’ll pay less for Vanguard Digital Advisor ($3,000 minimum deposit and a 0.20% annual fee), you won’t be able to utilize personalized support from a professional financial planner.
    • Personal Capital: Personal Capital offers competitive robo-advisor services. The investment app also gives you access to human financial advisors, and it offers account features like tax-loss harvesting, single stock diversification, Retirement Planner, and more. The biggest drawback is cost. You’ll need a minimum balance of $100,000 to get started, and you’ll pay between 0.49% and 0.89% in management fees.
    • Schwab Intelligent Portfolios: This advisor offers several attractive features, least of which is a $0 advisory fee. But you’ll need at least $5,000 to get started, and you won’t have access to Financial Planners (though you will have access to professionals who can answer customer service and investing/portfolio questions) unless you upgrade to the premium service, which requires a balance of $25,000, a one-time planning fee of $300, and a monthly fee of $30.
    • Fidelity Go: Created as Fidelity Investments’ robo-advisor offering, Fidelity Go provides low-cost automated investment management and expense ratio-free funds but doesn’t offer tax-loss harvesting. There’s a tiered pricing structure that charges 0.35% for balances above $50,000. And you won’t be able to consult human advisors unless you upgrade to Fidelity Personalized Planning & Advice, which requires a $25,000 minimum and 0.50% annual fee.
    • E-Trade Core Portfolios: E-Trade’s robo-advisor charges a reasonable annual fee of 0.30% on all balances (with a $500 minimum), but doesn’t offer tax-loss harvesting. While E-Trade Core Portfolios’ customer service is strong, investors have no access to human financial advisors. 

    Find a financial advisor online

    How to find an in-person financial advisor

    If you’d rather meet with an expert face to face, here are the best free online tools for finding one in your area:

    • CFP Board’s Let’s Make a Plan
      • This is a database of all CERTIFIED FINANCIAL PLANNER™ professionals who are authorized to use their CFP® marks by the CFP® Board and are accepting new clients.
      • Using the advanced search function, you can choose from over 40 focus areas you’re looking to get help with and include your current amount of investable assets.
      • Click here to visit the CFP Board website.
    • XY Planning Network
      • This database helps connect young professionals — those included in generations X and Y (millennials) — with individual advisors.
      • Every advisor holds the CFP® certification, is a fiduciary, does not require a minimum net worth to take on new clients, and does not earn commissions.
      • Click here to visit XY Planning Network.
    • SmartAsset’s SmartAdvisor Match tool
      • This tool asks users to answer a few questions about their income, savings, investments, and goals. In less than 10 minutes, it matches you with up to three advisors who will reach out to you after SmartAdvisor’s concierge team calls to confirm your request.
      • Every financial advisor on the platform is a fiduciary, must be registered at the federal or state level, and has not had a felony conviction or disclosure within the past 10 years.
      • Click here to visit SmartAdvisor.
    • The National Association of Personal Financial Advisors

    How we determined the winners

    We compared a long list of Registered Investment advisors (RIAs), weighing the following five categories equally:

    Fees: What are the costs (i.e., expense ratios, trading fees, advisor fees)? Are they justified when considering the services offered? What is the minimum balance for an investment account? Is it accessible for beginners?

    Investment selection: What is included for the cost? Is there a good variety of investments to choose from? What else do you get working with this company (e.g. savings or checking accounts, budgeting tools, financial advice)?

    Access: Who can use the service? How easy is it to navigate the platform, and are educational resources and/or human advisors available? Is it limited to a certain geographic location or available nationwide? Can you access your account via mobile app? 

    Ethics: Are the experts Certified Financial Planners and/or fiduciaries? Does the company have any disciplinary history over the past three years? What is the company’s investing philosophy? How is its legal standing, and how does the Better Business Bureau rate it (if its BBB profile exists)?

    Customer service: Which forms of customer support does each platform offer? Is phone support available? Does it offer 24/7 service? Is live chat available, and can you use any other quick methods of getting in touch?

    Frequently asked questions

    Personal Finance Insider’s mission is to help smart people make the best decisions with their money. We understand that “best” is often subjective, so in addition to highlighting the clear benefits of a financial product, we outline the limitations, too. We spent hours comparing and contrasting the features and fine print of various products and services so you don’t have to.

    The best financial advisor depends on what you’re looking for. There are typically two categories: so-called robo-advisors, which use computer algorithms to create an investment portfolio and offer either digital or human recommendations, and advisor matching companies, which connect clients with credentialed human advisors.

    Someone seeking comprehensive and personalized advice and a low-effort investment approach should consider SoFi Automated Investing, which creates a custom portfolio aligned with your goals and offers no cost sessions with certified financial planners. For investors with balances over $100,000, a good option is Betterment, which offers goals-based portfolios and complimentary, ongoing financial advice.

    Financial advisors who are providing financial advice often charge by the hour, typically between $100 to $300. Advisors who are creating a comprehensive financial plan tend to charge a flat rate between $1,000 and $3,000. 

    If you hire an advisor to manage your investment portfolio you’ll be charged a percentage of your account balance, typically between 1% and 3% annually. While that’s much higher than the fees that the best robo-advisors charge, you get the added benefit of being able to build a relationship with a trusted source who can adjust your strategy as needed, provide personal recommendations, and answer questions when they arise.

    Many traditional financial advisors require clients to have at least $100,000 in an investment account before they’ll manage it. Many online financial advisors (or robo-advisors) have no minimums. 

    If you’re looking for financial advice only, many advisors don’t care about a minimum net worth, income, or investment balance as long as you can afford their fee.

    Not everyone needs a financial advisor — human or otherwise. However, you should consider paying a financial advisor if you need specific advice on your finances or investment strategy or you’re too overwhelmed or confused by your money to plan for retirement or invest in the stock market. 

    Most online financial advisors — which may or may not give you access to a human expert — charge clients monthly or quarterly. You can always cancel if you don’t feel like you’re getting your money’s worth.

    A financial advisor is a catch-all term that includes financial planners and investment advisors. Most online advisors offer both investment management — whether it’s carried out by a human or a sophisticated computer algorithm — and financial planning services or tools.

    Certified financial planners, or CFPs, are trained extensively in several areas of financial planning, including retirement, taxes, insurance, and estate planning. They also abide by the fiduciary rule, which means they’re legally obligated to put their clients’ interests ahead of their own and their firm’s. All CFPs must be fiduciaries, but not all fiduciaries have to be CFPs.

    The best financial advisors follow the fiduciary rule, meaning they operate in their clients’ best interest, and are fee-only. This means client fees are their only compensation and they don’t earn commission when you invest in certain funds or buy financial products.

    Tanza is a CFP® professional and former correspondent for Personal Finance Insider. She broke down personal finance news and wrote about taxes, investing, retirement, wealth building, and debt management. She helmed a biweekly newsletter and a column answering reader questions about money. 
    Tanza is the author of two ebooks, A Guide to Financial Planners and “The One-Month Plan to Master your Money.”
    In 2020, Tanza was the editorial lead on Master Your Money, a yearlong original series providing financial tools, advice, and inspiration to millennials.
    Tanza joined Business Insider in June 2015 and is an alumna of Elon University, where she studied journalism and Italian. She is based in Los Angeles.


    Rickie Houston, CEPF

    Wealth-Building Reporter

    Rickie Houston is a wealth-building reporter for Business Insider, tasked with covering brokerage products, investment apps, online advisor services, cryptocurrency exchanges, and other wealth-building financial products. He is also a Certified Educator in Personal Finance (CEPF).
    Previously, Rickie worked as a personal finance writer at SmartAsset, focusing on retirement, investing, taxes, and banking topics. He’s contributed to stories published in the Boston Globe, and his work has also been featured in Yahoo News.
    He graduated from Boston University, where he contributed as a staff writer and sports editor for Boston University News Service.
    Learn more about how Personal Finance Insider chooses, rates, and covers financial products and services »


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