This group of robo-advisors and automated investing platforms allows a sophisticated investor to fine-tune a portfolio. You can delete individual stocks from the suggested portfolios, and in some cases pick a replacement.
To select the top five robo-advisors for sophisticated investors, we re-weighted our scoring rubric to emphasize the customizability of the portfolios, with a focus on the ability to include or exclude individual stocks.
Best Robo-Advisors for Sophisticated Investors in July 2020:
- M1 Finance
- Motif Investing
- Interactive Advisors
- Personal Capital
- Vanguard Personal Advisor Services
Motif closed on May 20, 2020
Motif Investing ceased business on May 20, 2020, and transferred all remaining customer accounts to Folio Investing. We are working on a Folio review. In the meantime, sophisticated investors should consider one of the other services on this list.
- Account Minimum: $100 ($500 minimum for retirement accounts)
- Fee: 0%
M1 Finance offers a 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’s target customer has a long-term investment focus and experience with using a traditional online brokerage to invest in stocks and ETFs. M1 is offering these potential clients a lower-cost alternative that allows fractional share transactions and a large amount of control over the portfolio contents. This is the key difference between M1 and many other offerings, as you often are giving up much of the control in exchange for the portfolio management services.
Margin loans are allowed, and M1 Borrow lets you borrow up to 35% of your account value (minimum account size: $10,000) at 3.5% interest (2% for M1 Plus clients) for non-investing purposes. The usual limit on margin lending is 50% of the account value, but M1 has chosen to be more conservative with its lending to avoid margin calls. You can also place trades for individual stocks or ETFs during the daily trading window. M1 does not currently have the ability to consolidate external accounts.
You can trade fractional shares so you are fully invested
No trading fees or asset management fees
Flexible portfolio building, including more than 80 "expert" portfolios
The dashboard illustrates the current composition of your portfolio
You can also place individual stock/ETF orders
Trades are placed once per day during a “trading window,” which puts transaction timing out of your control
Accounts with less than $20 and no trading activity for 90 days are charged a maintenance fee
There is no online chat capability and most support is typically through email
The platform offers very little help for setting financial goals
You cannot consolidate external accounts for planning purposes
- Account Minimum: $1,000
- Fees: 0.25% for managed portfolios, 0–0.50% for others
Motif Investing shut down on May 20, 2020, and all existing accounts have been shifted to Folio Investing. Motif customers are eligible for a discounted fee on Folio Investing’s Unlimited pricing plan. Folio is a subscription service with monthly fees that range from $5 to $29.95 per month.
Motif Investing allows clients to express their views through their investments, such as, “I’d like to invest in drones” or “I want to buy beaten-down stocks.” Impact Portfolios, launched in 2017, is an extension of the offerings the firm has already made available. These portfolios are extremely customizable, allowing clients to delete the stocks they don't want to hold. CEO Hardeep Walia would prefer that these portfolios not be thought of as automated, though they offer many features of automated investing, including regular deposits, rebalancing, and tax-loss harvesting. Margin is available to brokerage clients (not for Impact portfolios), but the rates are higher than average. You can trade individual stocks, in real-time, in a regular brokerage account for $4.95 per transaction.
Users can specify a drift threshold to exert some control over the frequency with which an account is rebalanced. Reinvestment is triggered any time there is $250 cash in an account, which can happen due to a deposit or an accumulation of dividend payouts. The base rate for managing an impact portfolio is 0.25%. Many other motifs, which you can access using a regular brokerage account, have no management fee—though there is a $4.95 fee to place a trade or rebalance certain portfolios.
Portfolios are visible prior to account funding and are very customizable
Asset models for Impact Portfolios are constantly updated
The equity portion of most portfolios is invested in individual stocks
Getting started is simple—you type in your age, your investing target, and risk tolerance
You have to open a separate account with Motif to invest in an impact portfolio
Very little in the way of goal-planning capabilities
Clients must have a valid U.S. Social Security number
There is little offered in terms of general investing education
- Account Minimum: $100 for portfolios managed by Interactive Advisors. $10,000-$120,000 for portfolios managed by boutique money managers.
- Fees: 0.08-1.5% per year, depending on advisor and portfolio chosen
Interactive Advisors, a service offered by Interactive Brokers, offers a wide range of portfolios from which to choose. At the lower end of the cost scale, you will find rules-based automated portfolios from their Smart Beta (0.08% management fee), Diversified (0.20%) and Asset Allocation models (0.12%), while actively managed portfolios run by money managers are at the higher end of the range (0.50-1.5%). Existing Interactive Brokers customers can partition a portion of their existing portfolios and invest in one (or more) of those offered.
Interactive Advisors is among the handful of robo-advisors that offers margin lending as well as loans against the value of your portfolio, though both require a regular Interactive Brokers account in addition to the advisory account. Interest rates for both are a maximum of 1.62%. You can earn up to 0.5% interest on the cash in your account, but there are multiple restrictions that will keep small balances from earning anything. However, if you own more than 100 shares of an individual stock or ETF, you can participate in Interactive Brokers' stock loan program, which can generate some passive income on your holdings.
Interactive Broker's PortfolioAnalyst feature lets you consolidate all your financial accounts in one place so you can get a picture of all of your assets. You can see summary values for each individual financial institution or consolidated across all financial institutions and different time periods, including current and prior balances, return percentage, and percent change in value. Compare your returns to over 200 benchmarks, or create your own.
Wide range of portfolios offered
Most portfolios include baskets of stocks rather than ETFs
Actively managed portfolios run by boutique wealth managers
The PortfolioAnalyst tool lets you consolidate and track all of your financial accounts
Some of the actively managed portfolios have very high minimums
The process of opening and funding an account is more difficult than at other robo-advisories
Not clear how much you will pay since your fees include commissions on stock trades
You need a large account (over $100,000) and a high cash balance (over $10,000) to earn interest on idle cash
Vanguard Personal Advisor Services
- Account Minimum: $50,000
- Fee: 0.30% of assets under management (excluding cash)
Vanguard PAS offers an excellent fit for mature investors looking for a financial institution with a long and stable history. Regular access to financial advisors, with regular coaching and management increasing the potential for superior returns. Of Vanguard PAS applicants, 80% to 90% have other Vanguard accounts, according to a spokesman, and entry requires $50,000 across all assets. The firm charges a 0.30% fee on the first $5 million in assets, dropping to 0.20% between $5 million and $10 million. Accounts up to $500,000 are assigned to a group of advisors, while accounts above that level get a dedicated advisor. Assisted by an advisor, you can add or remove individual securities from your account.
The website features an impressive variety of tools and calculators to help clients figure out how much money needs to be set aside to reach goals within realistic time frames. Many of these resources focus on retirement, but college planning and life assessment calculators are equally valuable in meeting long-term financial objectives. Clients can apply these valuable tools to estimate their total costs of retirement, perform top-down reviews of assets and plan major life goals that include college savings.
Access to financial advisors
Competitive management fee structure
Ability to add or remove individual securities
Vanguard is a venerable institution with a long and stable history
Lengthy and somewhat confusing setup process
Some costs are not included in the management fee
Very high account minimum
- Account Minimum: $100,000
- Fees: 0.89% to 0.49% for accounts over $1 million
Personal Capital considers itself a digital asset management service that also includes personalized advice from financial planners. The firm is one of the first to put tools in investor’s hands and automate elements of portfolio management. There are two ways to interact with Personal Capital. The first is a free planning tool that collects data from all of your financial accounts and makes some recommendations to improve returns. It’s well worth checking out, no matter where you bank or invest. The fee analyzer looks at your existing allocations and fees, suggesting alternatives that can save you fees or improve your diversification – and sometimes both. The Investment Checkup can be even more valuable as it pulls in all your accounts, analyzes them and makes recommendations on your overall portfolio mix.
The second way to interact with Personal Capital is an asset management service with a minimum account size of $100,000 to start. Clearly, this is not a service for the newcomer to saving and investing. Personal Capital has 12 different portfolio allocations and nearly unlimited strategic variations on those allocations based on personalization for each individual client, taking each investor’s financial life and specific goals into consideration. However, you will not be able to see the portfolio recommendation until after you have talked with your assigned advisor.
Account holders are matched with a financial planner
Tax optimization strategies used on portfolios keep the tax burden low
High-net-worth clients can use the Private Client services, which are competitively priced
Investing account customers require a very high minimum of $100,000
The mobile app is missing some key features available only on the website
There is no way to opt-out of receiving phone calls during the sign-up process
Wealth management fees are high for a robo-advisor
Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of robo-advisors. Our 2019 reviews are the result of six months of evaluating all aspects of 32 robo-advisor platforms.
While robo-advisors are generally geared towards those who are looking for more of a hands-off investing experience, there are several that provide the ability to have more command and control over your investments. In this category, we favored those that offered customizable portfolios, the ability to invest in individual stocks, deeper insights into portfolios prior to funding, and tax loss harvesting opportunities. For sophisticated investors, we also looked at each robo-advisor’s research tools, as well as more advanced account services such as the ability to take out a loan backed by the investor’s portfolio balance.
Our team of industry experts, led by Theresa W. Carey, conducted our reviews and developed this best-in-industry methodology for ranking robo-advisor platforms for investors at all levels. Click here to read our full methodology.