Best Robo-Advisor for Beginners – Get Started with Investing

You want to invest, but don’t know how. It’s too scary to just jump in headfirst and besides, you don’t know the first thing about investing.

What do you do?

Well, you could avoid investing, but then you’ll always be a beginner – you’ll never gain experience and you won’t grow your money.

… Or you could jump in and try it and see what happens.

Once you’re ready to jump in, decide what type of ‘beginner’ you are:

This is actually the most important question you have to ask yourself when choosing the right service

Do you want to invest, but don’t know how or when?

Do you want a hands-off method so you don’t have to be too involved? Do you want a set-it-and-forget it method?

Then go for an automated robo-advisor.

Do you want to invest and want to be ‘all in’?

Do you want to set up and customize your own portfolio? Do you want to know what’s going on at all times?

Then go for a DIY robo-advisor.

No matter where you fall, there is a good robo-advisor for you. Check out the options below. Are you ready to finally jump in and get started?

Hands-off – Automated Robo-Advisors for Beginners

I’ve rounded up the 7 best robo-advisors for beginners. I’ve broken them down by hands-off robo-advisors for those beginners that just want to invest but don’t want to be too involved and hands-on or DIY robo-advisors. We’ll get started with the automated ones, and analyze the DIY options further down in the article.

6. M1 Finance

If you’d rather have a say in the investments your robo-advisor chooses, you’ll love M1. You choose the investments and M1 manages the portfolio for you. M1 has pre-built pie portfolios, but you can customize them further by adding stocks from the New York Stock Exchange to them. M1 bases your purchases on the portfolio you chose.

You’ll choose from pies that pertain to your goals. For example, are you saving for retirement, do you want to invest in all responsible sectors, do you have your eye on a specific industry, or do you prefer investing in just stocks and bonds?

M1 lets you lead, and they pick up where you left off, managing the portfolio for you.

Pros and Cons

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Main Features

• M1 automatically reinvests any dividends earned once you reach $10
• Choose from as many as 2,000 ETFs and individual stocks
• If you have at least $10,000 invested, you have access to a credit line of up to 35% of your portfolio
• Invests in ‘pies’ that have pre-selected categories

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Main Features

• No minimum opening balance required
• Portfolios built based on your financial goals
• Betterment works as your fiduciary basing their investment advice on your best interests
• Offers tax loss harvesting to minimize your tax liabilities
• Allows customization of the portfolios it suggests

Pros and Cons

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2. Fidelity Go

Fidelity go was created for beginners. Its user-friendly interface makes investing simple, and not overwhelming. Setting up an account is easy. You answer five simple questions about your finances and goals and Fidelity Go provides an array of portfolios for you.

Fidelity Go openly shows you the fees involved with the chosen portfolio so you know upfront what to expect. Fidelity Go offers advice for all major milestones, and planning tools to help you make the most out of your investments.

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Main Features

• Provides a suggested portfolio based on your risk tolerance and goals
• Fidelity advisors change your portfolio if the market shifts
• You can easily manage your account online, including scheduling deposits and tracking your progress

Pros and Cons

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3. Wealthfront

Wealthfront helps clients create the complete financial picture. They focus on your investment at Wealthfront, but also consider other information to help create a clear financial picture. Wealthfront is all about setting and achieving goals, and they make it very user-friendly with their mobile apps and online platform.

As a part of the sign-up process, you’ll link your payment account (such as your checking account), which makes it easy to make regular contributions to your Wealthfront account for investing. Wealthfront’s website is a wealth of information with guides and articles to help you make the right financial choices.

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Main Features

• Open a taxable, retirement, or college savings plan
• Wealthfront doesn’t charge any other fees outside of the advisory fee
• Easily link an external bank account or transfer funds from another broker to fund your account
• Set up multiple goals using the Wealthfront Path system that helps you manage your goals and the trade-offs of each
• Wealthfront automatically rebalances your portfolio

Pros and Cons

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4. Merrill Guided Investing

Merrill Guided Investing makes it easy to get started investing. All you have to do is answer some questions and choose a goal. Merrill takes into consideration any other investment accounts you have going to determine how much you must invest with the robo-advisor to meet your goals.

Merrill Guided Investing walks you through the process, asking simple questions to make it easy to set up and reach your goal. Every screen offers assistance and assesses your risk tolerance along the way. Merrill’s principal purpose is to help save for retirement, but you can set up other goals too.

Pros and Cons

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Main Features

• Get a recommended portfolio from Merrill investment advisors
• Your portfolio consists of ETFs and mutual funds that align with your goals
• Merrill investment advisors rebalance your portfolio as it changes
• Many investment planning tools on the Merrill Edge website

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5. E*TRADE Core Portfolios

E*TRADE Core Portfolios is a great first step for investors. Its automated system walks you through the investment process, allowing you to tailor your investments based on your risk tolerance and goals. E*TRADE’s system walks you through the questions easily, but you can also request more information if you’re ever stuck.

New investors appreciate the human help E*TRADE offers its robo-advisor clients, as you can talk to a representative on the phone or in person at a local location.

Pros and Cons

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Features

• E*TRADE has both an online platform and mobile app, but the mobile app is more user-friendly
• E*TRADE automatically rebalances your portfolio to keep you on track to meet your goals
• Offers a variety of investment options including socially responsible and tax sensitive options
• Get access to all of E*TRADES robust tools and research offered to full-blown investors

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Hands-on – DIY Robo-Advisors

6. Betterment

Are you looking for a robo-advisor that’s easy to set up and get started? Look no further than Betterment.

All you need to sign up is your age, annual income, and a chosen goal. That’s it. Betterment doesn’t ask crazy risk-based questions or make you jump through hoops. Instead, they show you portfolio suggestions and explain its risk. You then adjust the percentages until the portfolio has a risk that matches your tolerance.

Betterment watches your goals and prompts you to make changes when your portfolio may fall short of your goal. This may include adjusting your portfolio or making higher or more contributions.

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7. MarketRiders

Do you want a complete DIY investment option with a robo-advisor touch? MarketRiders is a great option. The MarketRiders Do-It-Yourself platform allows you to invest in low-cost ETFs. Beware, though, MarketRiders charges trading fees on top of its management fees and ETF expense ratios.

MarketRiders’ professionals always provide unbiased advice and you get a free 30-day trial. You can manage up to 10 portfolios with one account and get as little or as much help as you want with MarketRiders. They’ll help you choose the right ETFs to buy or sell to rebalance your portfolio and they’ll send alerts if your portfolio goes too far off track.

Pros and Cons

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Main Features

• Works with any brokerage account
• Help you minimize fees, keeping more of your earnings
• Focuses on low-cost ETFs to minimize risk and increase your earnings
• Easily access your account on the web-based platform and know where you stand at any time

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Bottom Line

So what’s the best robo-advisor for hands-off investing?

Wealthfront takes the cake. You can open any type of account (taxable, retirement, or college savings), and you’ll pay only 0.25% for the management fee. You can link any external accounts and you’ll get advanced financial planning services that invest in low-cost ETFs, making the most of your money.

If you’re a hands-on investor, M1 finance offers the most benefits. Choose your pre-built pie and adjust it as you see fit. Whether you want to add stocks or reduce the risk with more conservative bonds, you choose how you want your portfolio to look and M1 will support you along the way. With as many as 2,000 ETFs to choose from, M1 has a lot to offer hands-on investors.

How will you invest your money? Are you ready to give robo-advisors a go? Your money isn’t earning anything just sitting there. Why not take a chance and see what a robo-advisor can do for you?

Feel free to share your experience with any of the above mentioned robos in the comment section!