Bankrate: The best free robo-advisers

Robo-advisers are an excellent option for investors looking to simplify their investment management at a lower cost than traditional financial advisers. In fact, some robo-advisers charge no annual management fee at all.

Here’s what else you need to know about robo-advisers, as well as five that will manage your money for free.

What exactly is a robo-adviser?

Robo-advisers use algorithms to construct an investment portfolio for you based on your responses to a few questions about your risk tolerance and investment objectives. Many robo-advisers also include features like tax-loss harvesting and automatic rebalancing, which can boost your returns while making investing as hands-off as possible.

The best robo-advisers charge significantly lower fees than traditional financial advisers, and you can usually get started with a small investment. Some robo-advisers will manage small amounts of money for free, while others do not charge any management fees. Keep in mind that the funds used to build your portfolio will almost always incur fees.

Top robo-advisers for free

1. Schwab Intelligent Portfolios

Charles Schwab is probably best known as one of the best online brokers, but it also has an excellent robo-adviser offering in the form of Schwab Intelligent Portfolios. The basic tier is free and includes portfolio management, automatic rebalancing, and tax-loss harvesting, though tax-loss harvesting requires at least $50,000 in assets.

Schwab builds your portfolio from dozens of different funds, with fees ranging from 0.02% to 0.19%. To be sure, Schwab uses several of its own funds in portfolio construction, but it also offers funds from low-cost leaders like Vanguard, so you can be sure you’re not overpaying in fund fees.

A premium tier includes unlimited access to financial advisers, but there is a one-time planning fee of $300 and a monthly fee of $30 after that.

For the basic tier, there is no management fee.

Fees for mutual funds range from 0.02% to 0.19%.

2. Fidelity Go

Fidelity Go is another excellent robo-adviser option that is ideal for those who are just getting started. You will not be charged an advisory fee on assets under $25,000, but those with assets above that amount will be charged 0.35% annually.

Another advantage of using Fidelity Go is that you will not pay additional fees for the funds in which you are invested because Fidelity builds portfolios using its own zero-cost mutual funds. That means your total costs on assets up to $25,000 will be zero, which is a great deal for those just starting out.

Management fee: Up to $25,000 in assets are freed.

Fees for funds: none

3. Interactive Consultants

Interactive Advisors is a low-cost robo-adviser, but it’s only free if you manage your own portfolio, which may be inconvenient for some investors. However, if you choose to have Interactive Advisors manage your portfolio, it will only cost you 0.12% per year, which is significantly less than the typical fee of 0.25%.

You can select from a variety of themed funds with expense ratios ranging from 0.08% to 0.75%. Interactive Advisors caps fund expenses at 0.75%, so you’ll never pay more. Fund options include active and passive strategies, industry funds, ESG funds, and others.

If you manage it yourself, there is no management fee.

Fund fees are limited to 0.75%.

4. SoFi Automated Investing

SoFi Automated Investing is one of the most affordable robo-adviser options available. Because there is no management fee, your only costs are the expense ratios of the funds in your portfolio, which are kept to a minimum as well. Your total costs could be around 0.10% per year, or $10 for every $10,000 invested.

You’ll also have access to financial advisers who can assist you with your financial plan and other aspects of your financial life.

There is no management fee.

Fees for mutual funds range from 0% to 0.35%.

5. Ally Invest Robo Portfolios

There is no advisory fee with Ally Invest Robo Portfolios, but there is a catch: you must select the “cash-enhanced” portfolio, which keeps 30% of your money in cash. The cash earns a competitive interest rate that has risen in recent years, but your returns may lag behind the market-focused portfolio. If you choose the more fully invested option, you will pay 0.30% per year.

Once you’ve decided on the type of account you want, you’ll be presented with four portfolio options comprised of low-cost ETFs. The fund fees range from 0.03% to 0.25%, with the majority being less than 0.10%.

For “cash-enhanced” portfolios, there is no management fee.

Fees for mutual funds range from 0.03% to 0.25%.

Before making an investment decision, all investors should conduct their own independent research into investment strategies. Furthermore, investors are cautioned that past performance of investment products is no guarantee of future price appreciation.