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Robo-Advisors in 2022

Airplanes can fly themselves and soon enough, the world will have self-driving cars. It’s clear that our society is becoming more reliant on technology. While we may trust self- driving cars and planes, what about robots managing our money?

Should you use a Robo-advisor to get started investing?

People use professional Investment Advisors to choose their investments for them all the time. This service, of course, isn’t free. The time and expertise required from a professional often requires fees. For many people who are just getting started, these fees may make investing too expensive. That doesn’t mean that new investors don’t want their money professionally managed for them. This is where Robo-advisors come into play. Robo-advisors entered the scene in 2008 and have exploded in popularity since then.

What is a Robo-Advisor?

A Robo-Advisor is an investment advisor that builds and manages your investment portfolio with little to no human input. Instead, a Robo-Advisor relies on computer software to generate investment recommendations based on your responses to questions. Normally, you answer a set of questions about your investment goals, risk tolerance and expected investment amount. Based on your responses, the Robo-advisor will create an investment plan for you. The Robo-Advisor can then manage the account on an ongoing basis.

Are Robo-Advisors expensive?

Generally speaking, Robo-advisors are affordable. Some Robo-Advisors will not charge a fee if you have a small amount of money to invest while others will charge small fees. You can see some of the fees listed below.

What type of accounts can you open with a Robo-advisor?

Robo-advisors allow you to open various accounts. The type of account that you open will depend heavily on your financial goal. For example, if you are investing for retirement, you would likely open an Individual Retirement Account, or an IRA.

If you were investing for other reasons, such as general wealth building, you may open a brokerage account. Most Robo-advisors will manage each of these account types. When you begin answering questions about your goals, Robo-advisors will provide you with the options for which account types match your specific goals.

What are some common Robo-advisors?


Betterment allows you to get started investing with as little as $10. They charge a fee of 0.25% for a Robo-Advisor. However, if you want detailed financial advice, they have a Premium option to provide you access to a CFP® for .40%. You are required to have an investment balance of $100,000 or more to qualify for the Premium option. Betterment also offers Crypto investing as well as socially responsible investing. Betterment also allows you to see your net worth, connect outside accounts and track your progress.

Fidelity Go

Fidelity Go professionally manages your money and there is no minimum to get started. You do need at least $10 in the account before your funds will start being invested. As far as fees, Fidelity Go does not charge any fees if your account balance is less than $10,000. Fees start once you reach $10,000.

$10,000-$49,999= $3 a month
$50,000+= 0.35% a year


Ellevest also doesn’t have a minimum balance requirement to get started investing. There are minimums for certain portfolios that range from as low as $1 to $240. One key difference about Ellevest is that it is a Robo Advisor that is geared towards women. Their plans start at $5 a month and factor in unique features that apply to women such as longer life spans, career breaks and pay gaps.

While this is certainly not the complete list of Robo-Advisors that are available, they are a few popular ones and a great place to get started researching.

What are the downsides to using a Robo- Advisor?

One particular downside to Robo-Advisors is the limited human interaction. When you are working with a financial advisor, one major benefit is that they can help you understand the volatility of investing. They can guide you through your emotions and help you stay invested in market downturns. Some Robo-advisors will give you the option to speak to an advisor, however, it likely won’t be a personalized relationship.

If you are looking for a personal relationship or community, consider joining Snowball Premium for a chance to interact with our money community, participate in Masterminds and work with a Financial Coach one on one.

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