Best Free Robo-Advisors | Bankrate

A robo-advisor is a great choice for investors who want professional portfolio management minus the high price tag traditional money managers charge. 

You’ll pay around 1 percent to 2 percent of your account balance (assets under management, or AUM) in fees each year for a human investment manager, versus roughly 0.25 percent of AUM (or $25 annually for every $10,000 you invest) using a robo-advisor. And because automated portfolio management firms can do business at scale, some will even manage small amounts of money for free or charge no management fees at all. (We name names below.)

Why so cheap? In a word, technology. 

Robo-advisors use algorithms to build a diversified investment portfolio for you based on your answers to a handful of questions about your risk tolerance and investment goals. Ongoing administrative tasks, such as portfolio rebalancing and even tax-loss harvesting, are also made as hands-off as possible via smart automation. 

Many of the best robo-advisors also have low investment minimums. Keep in mind that free account management doesn’t mean completely fee-free investing. With just one exception — Fidelity Go — customers still pay fees for the exchange-traded funds (ETFs) that are used to build their portfolios.

Here are four robo-advisors that will manage your money without a fee.

Best free robo-advisors

1. Schwab Intelligent Portfolios

Charles Schwab — one of Bankrate’s best online broker picks — also has a top-notch robo-advisor offering in Schwab Intelligent Portfolios. 

Schwab charges no portfolio management fee for the robo’s basic entry-level tier, which includes automatic rebalancing and access to goal-setting and tracking tools. It has a $5,000 account minimum. Access to free tax-loss harvesting, though, is limited to customers with at least $50,000 in assets in a taxable portfolio.

Schwab chooses from dozens of different funds to build your portfolio, and most of the fund fees range from 0.02 percent to 0.19 percent. To be sure, Schwab uses several of its own funds in portfolio building, but it also offers funds from low-cost leaders such as Vanguard, so you can be sure you’re not paying too much in fund fees.

A premium tier comes with unlimited access to financial advisors, but you’ll pay a one-time planning fee of $300 and $30 per month after that.

• Account minimum: $5,000
• Management fee: Free for basic tier
• Fund fees: 0.02 percent to 0.19 percent

2. Fidelity Go

Fidelity Go is another strong free robo-advisor choice, especially for those who are just starting out. Customers pay no advisory fees on assets up to $25,000. 

Once your account balance rises above that, a 0.35 percent annual management fee applies but only on assets above the free threshold. 

The savings don’t end there. Another bonus of using Fidelity Go is that you won’t pay additional fees for the funds that you’re invested in, because Fidelity uses its own zero-cost mutual funds to build portfolios. That means your total costs on assets up to $25,000 will be zero — quite a deal for those just starting to build an investment portfolio. Once you amass more than $25,000, you unlock another perk: Free and unlimited 30-minute planning calls with a Fidelity advisor.

• Account minimum: $0 to open; $10 to invest
• Management fee: Free up to $25,000 in assets
• Fund fees: None

3. Interactive Advisors

If you want (or are willing) to take on certain portfolio management tasks yourself, Interactive Advisors offers a robo-lite plan that charges no management fees. 

The DIYish option starts with choosing from a range of pre-constructed portfolios — baskets of low-cost ETFs categorized by theme. Interactive Advisors handles the initial portfolio construction, but ongoing management tasks (rebalancing being the biggest) is not automated. (Interactive Advisors also offers a more classic robo-investment service that provides everything from portfolio building to ongoing management for a 0.20 percent annual management fee.)

Customers who opt for the free service can choose from a number of different themed funds that come with expense ratios ranging from 0.10 percent to 0.75 percent. Interactive Advisors caps fund expenses at 0.75 percent, so you know you won’t pay more than that. Fund choices include a variety of active and passive strategies, industry funds, ESG funds and more.

• Account minimum: $100, but some funds have higher minimums
• Management fee: Free if you manage it yourself
• Fund fees: Capped at 0.75 percent

4. Ally Invest Robo Portfolios

Like Interactive Advisors, Ally Invest Robo Portfolios offers both free and paid automated portfolio management plans. However, to avoid paying any out-of-pocket advisory fee, you’ll need to be comfortable allocating a high percentage of your investable assets to cash. 

Ally’s no-fee “cash-enhanced” portfolio keeps 30 percent of the portfolio’s assets in cash. The money does earn a competitive interest rate that has risen over the past few years, but your returns could lag the market-focused portfolio. Ally Invest’s more fully invested robo-managed portfolios come with a 0.30 percent annual management fee.

Once you select the type of account you want, you’ll have four different portfolio options that are built with low-cost ETFs. The fund fees range from 0.03 percent to 0.25 percent, but most are less than 0.10 percent.

• Account minimum: $0 to open; $100 to invest
• Management fee: Free for “cash-enhanced” portfolio
• Fund fees: 0.03 percent to 0.25 percent

Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.