At Investopedia, helping people find the right tools and platforms to manage their financial lives is a core part of our mission. Robo-advisors, also known as digital-advice platforms, have emerged as a popular solution for millions of investors.
2020 has been an anxiety-filled year for investors amid a global health pandemic and the worst recession since the Great Depression. Many investors, both new and experienced, have flocked to robo-advisors and other online investing platforms in search of guidance and stability amid the volatility.
With so many options available, our team evaluated more than 20 robo-advisor platforms, using our robust methodology to find the best for investors at all levels. Once a year we hand out awards to showcase the robo-advisors that have demonstrated excellence across a number of categories that cover the different needs that investors have.
Here are our winners for 2020.
Best Overall: Wealthfront
Wealthfront wins Best Overall for the Investopedia 2020 Best Robo-Advisors Awards because it offers the full package of goal-setting, planning, banking, and investing in an elegant, user-friendly platform.
Wealthfront offers top-notch goal-setting tools and a complete financial management system. Clients can use Wealthfront's Invest, Cash, Save and Borrow tools to accumulate wealth, manage cash, and open a fuss-free line of credit.
Best for Beginners: Betterment
Betterment wins our award for Best for Beginners in 2020 because its platform is intuitive, user-friendly, and full of educational resources.
The account setup design is exceptionally easy to navigate, with a process that is optimized for mobile devices. Users enter their age, annual income, and a goal to get started, bypassing the standard risk-related questions. Instead, Betterment presents you with an asset allocation suggestion and its associated risk, which you can change by adjusting the percentage of equity versus fixed income held in the portfolio. Betterment offers five portfolio types and clients can switch strategies after a portfolio is funded.
Best for Low Costs: M1 Finance
M1 Finance wins our award for Best for Low Costs in 2020 as it does not charge any portfolio management or trading fees, or any fees for deposits or withdrawals to a connected bank account.
You can sign up for an M1 Plus account for $125 (keep an eye out for frequent discount offers), which gives you a second daily trading window as well as a discount on the interest rate when taking out a loan through M1 Borrow. You’ll also earn interest on cash through the M1 Spend feature. Portfolios held in stock only will not incur any fund management fees.
Best for Goal Setting: Wealthfront
Wealthfront wins our award for Best for Goal Setting in 2020 due to the high quality of its goal-setting and planning technology, which is excellent and should serve as a model for other robo-advisors to emulate.
You can develop a detailed retirement plan, or connect to third-party data to figure out how much you should set aside for a planned home purchase or for college expenses. Setting up a Wealthfront account gives you access to Path, the free financial planning tool that integrates your account data and uses third-party data to better project your financial situation, whether or not you open an investment account.
Best for Sustainable Investing: Interactive Advisors
Interactive Advisors wins our award for Best for Sustainable Investing in 2020 due to its special emphasis on socially responsible investing products and the availability of pre-built portfolios invested according to ESG strategies.
This includes some of its Smart Beta portfolios. Beyond the ESG-focused portfolios, you can customize others by avoiding entire groups of companies that do not share your values, as well as setting single stock exclusions that automatically apply to all your investments. Each exclusion group typically comprises 25 stocks and is reviewed annually.
Best for Sophisticated Investors: M1 Finance
M1 Finance wins our award for Best for Sophisticated Investors in 2020 due to its unique combination of automated investing with a high level of customization, allowing clients to create a portfolio tailored to their exact specifications.
You can create portfolios containing low-cost ETFs or use individual stocks, or both. M1 offers potential clients a lower-cost alternative that allows fractional share transactions and a higher degree of control over portfolio construction than other robo-advisors provide.
Best for Portfolio Construction: Interactive Advisors
Interactive Advisors wins our award for Best for Portfolio Construction in 2020 because it offers a vast range of asset classes that can be used to build a portfolio.
Most portfolios contain fractional shares of up to 300 individual stocks. There are also portfolios made up of ETFs from Vanguard, Wisdom Tree, Legg Mason, State Street, and others. Other portfolios follow certain market sectors, including real estate, consumer discretionary spending, and utilities, allowing investors to take sector positions, which is something not many robo-advisories offer. You can also invest in a general global portfolio that includes equities and fixed income from across the globe.
Best for Cash Management: Betterment
Betterment wins our award for Best for Cash Management in 2020 because it offers tax-loss harvesting for all accounts, no matter the size, and a range of checking and savings account options.
Its cash management offerings, Betterment Checking and Betterment Cash Reserve, launched in April 2020. The checking account includes a debit card and reimburses ATM fees and foreign transaction fees. In June 2020, Betterment also added mobile deposit capability to its checking account offering. With two-way sweep enabled, cash is swept from the checking account into the reserve account, which pays a higher rate of interest.
Best for Portfolio Management: Personal Capital
Personal Capital wins our award for Best for Portfolio Management in 2020 due to the way the firm's advanced technology effectively manages risk and taxes.
Portfolios are monitored daily and rebalanced when they move outside the asset allocation boundaries. Personal Capital uses what it calls “Smart Weighting” to ensure true diversification by monitoring and reducing concentrated exposures to a given sector or investment style, while its investment management philosophy goes a step beyond tax-loss harvesting, seeking instead to optimize your tax burden.
Best for Education: Merrill Guided Investing
Merrill Guided Investing wins our award for Best for Education in 2020 due to the extensive resources provided in its Investor Education Hub on the website, which lets you choose a path based on your investing experience and interests.
The Hub aligns financial education content by sophistication level, topic, product, and delivery type (video, tool, tutorial, etc.). In addition, the Life Stage Planning section of the website has tools for everyone from those just starting out to those who are already retired.
Best for Mobile Experience: E*TRADE Core Portfolios
E*TRADE Core Portfolios wins our award for Best for Mobile Experience in 2020 due to its well-designed mobile app, which was updated in late 2019, making all features of the Core Portfolios experience exceptionally easy to use on your mobile device.
You can set up an account and enroll in the service using the app, and we found that the workflow on the mobile app is even easier than on the website.
Why We Do It
Finding the right robo-advisor to achieve your financial goals is more challenging than ever given the abundance of products available today. To make it easier, we user-tested over 30 online brokers to identify which robo-advisors offer the best solutions for investors in 2020. What we've created is a comprehensive set of reviews and rankings that will allow any investor to find the right robo-advisor for them.
To find out more about how we picked our top robo-advisors, read our full methodology.