Which Robo-Advisor is Best For You?
There are two common reasons people like robo-advisors. And Ally Robo Portfolios, Betterment and Wealthfront fulfill them!
First, they tend to be less expensive than their human counterparts, which immediately puts more money in your pocket.
Second, many have lower minimum investment requirements than traditional investment options do.
Both of these trends make robo-advisors more affordable and more appealing than human financial planners, for both new and experienced investors alike.
The three robos we’ll compare today – Ally Robo Portfolios vs. Betterment vs. Wealthfront – are low-fee, low or no minimum balance robo-advisors that offer quality services and have strong track records as safe, reliable companies.
*Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link.
Features at a Glance
|Features||Ally Robo Portfolios||Betterment||Wealthfront|
|Overview||Automated investment management robo-advisor platform.||Goals-based digital investment manager with access to financial advisors.||Digital investment manager with online financial advisor.|
|Minimum Investment Amount||$100||Digital: No minimum |
|Fee Structure||Zero aum management fees for all portfolios with a minimum of 30% cash assets. |
Management fee is .30% AUM for portfolios with less than 30% cash.
|Digital: 0.25% AUM for accounts up to $2 million|
Premium: 0.40% AUM for accounts up to $2 million
|0.25% AUM (after $5,000 free investment management)|
|Top Features||Goal-based robo-advisor with access to Ally Bank. Extensive diversification with ETFs. SRI, income, and tax-optimization portfolios.||Digital and hybrid investment management (with financial advisor access) options. All investors can text with financial advisors. SRI, income and smart beta portfolios available.||Automated investment management including daily tax-loss harvesting and portfolio review. Customize portfolio with crypto and 100+ additional ETFs.|
|Accounts Available||Individual and joint taxable accounts|
Traditional, Roth and rollover IRAs
|Individual and joint taxable accounts|
Traditional, Roth, rollover, and SEP IRAs
|Individual and joint taxable accounts |
Traditional, Roth, rollover, and SEP IRAs
529 college savings accounts
|Investment Funds||Low-cost index stock and bond ETFs. Includes diversified market cap, SRI, and global stock funds, and mortgage backed and municipal bond funds.||Low fee exchange traded funds from diverse asset classes. Includes smart beta and socially responsible investing.||Low fee, diversified stock and bond ETFs including municipal bond and dividend aristocrat stock funds. 100+ ETFs, risk parity and crypto funds.|
|Contact & Investing Advice||24/7 chat, phone or email||Phone M-F 9 am-6 pm ET - Email-24/7||Phone M–F 10 am–8 pm ET - Email-24/7|
|Free Services||Free account management.||Free portfolio review.||Free portfolio review and home buying guide.|
|Promotions||Free Account Management|
(with 30% cash allocation)
|Free Account Management Promotion||$5,000 Managed for Free|
Ally Robo Portfolios vs. Betterment vs. Wealthfront – Overview
What is Ally Robo Portfolios?
Ally Robo-Portfolios (formerly Ally Invest) was founded in 2016 when Ally Bank acquired TradeKing. As Ally Invest grew, they reimagined TradeKing into a new robo-advisor that offers a variety of investment options. Investors can choose form core, income, tax optimized and socially responsible portfolios.
Because Ally Robo Portfolios is part of the Ally Bank family, this robo-advisor is in the same camp as Fidelity Go and Schwab Intelligent Portfolios. But with Ally’s low minimum investment requirement and zero management fees (as long as your portfolio maintains a 30% cash allocation), it’s really competitive with independent robos like Betterment and Wealthfront.
And the Ally Savings Account is known to pay among the highest interest rates.
What is Betterment?
Betterment was founded in 2008, which makes it one of the pioneer robo-advisors on the market. In comparison to other independent robo-advisors, Betterment has dominated the charts for among the most assets under management. Betterment shines with access to human financial advisors for all clients.
It is also a goals-based advisor that offers financial advisors, cash management and many tools to help you manage your money.
What is Wealthfront?
Wealthfront was another early player in the robo-advising market, and, like Betterment, Wealthfront also boasts a top seat in terms of assets under management. This robo-advisor is known for providing additional services to clients, like loans and individual stock investing for larger accounts.
Wealthfront recently jumped ahead of peers by allowing customers to invest in two Greyscale cryptocurrency funds and to customize portfolios with ETFs of their own choosing. Wealthfront customers can choose from more than 100 ETFs and either create new portfolios, which Wealthfront will manage, or add additional ETFs to an existing account.
Despite it’s “all digital” claim, Wealthfront’s customer service reps are licensed and the PATH financial advisor is hands-down the most comprehensive digital financial advisor online.
Ally Robo Portfolios vs. Betterment vs. Wealthfront – Top Features
Ally Robo Portfolios Top Features
- Goals-based robo-advisor
- Access to Ally Bank
- Diverse investment options
- Socially responsible investments
- Tax-optimization portfolios
- 24/7 customer service
Betterment Top Features
- Access to human financial planners via text at all account levels
- Financial planning packages available for life milestones
- Socially responsible investments
- Smart Beta portfolios
Wealthfront Top Features
- Path digital financial planner
- Tax-loss harvesting on a daily basis
- Loans available
- High-yield cash savings accounts
- Cryptocurrency funds and 100+ ETFs for added customization
Ally Robo Portfolios vs. Betterment vs. Wealthfront – Who Benefits?
All 3 Robo’s are Best for:
Investors who want a small startup cost, rebalancing and manageable low fees will benefit from all three robo-advisors on this list.
Each of the robo-advisors offer high yield cash accounts and debit cards. Betterment offers checking accounts, while Wealthfront offers high-yield cash accounts and loans. Ally Robo Portfolios is a part of the full-service Ally bank with Ally’s high yield savings account.
Betterment is Best for:
Investors who want access to human financial planners will benefit most from Betterment. Whether you have a Digital or Premium package, you’ll be able to text with financial planners. Also good for investors seeking income and socially responsible portfolios.
Wealthfront is Best for:
Tech savvy investors seeking all-digital platform with daily tax-loss harvesting, crypto, customization options. Those seeking cash management and borrowing too.
Ally Robo Portfolios is Best for:
Those seeking a robo-advisor with other, non-investing features, and free investment management (must be willing to hold 30% cash within portfolio for free management). Ally Robo Portfolios also offers income, tax minimization and socially responsible choices.
Ally has the added benefit of being part of the Ally Bank family, meaning that clients can use the same company for all their financial needs.
Ally Robo Investing vs. Betterment vs. Wealthfront – Deep Dive
Fees and Minimums
Minimums Winner: Betterment is the minimums winner with no minimum investment required.
Fees Winner: This category is more difficult. If you’re comfortable with 30% of your portfolio invested in cash, then Ally Invest is the winner. If not, then Betterment and Wealthfront win with a 0.25% AUM fund management fee.
Ally Fees and Minimums
Ally Invest has a very low minimum investment requirement at only $100, making it much more affordable than robo-advisors by other large banks.
Another selling point is that Ally Invest does not charge any account management fees for clients whose portfolios have a minimum of 30% cash assets. The fee is 0.30% AUM for portfolios who do not meet this cash asset minimum.
Betterment Fees and Minimums
Betterment Digital does not require any minimum investment. This account type charges account management fees of 0.25% AUM for accounts valued up to $2 million, or 0.15% AUM for accounts valued over that amount.
Betterment Premium is the next level service and requires a $100,000 minimum investment. The fees for this account are 0.40% AUM for accounts under $2 million; fees drop to 0.30% AUM for accounts over $2 million.
Wealthfront Fees and Minimums
Wealthfront has a minimum investment requirement of $500. Clients will pay 0.25% AUM for account management.
Human Financial Planners
Winner: Betterment with texting for all clients, a la carte financial planning packages for Digital customers and Certified Financial Planners for Premium clients.
Although Ally Invest Managed Portfolios sounds like they’re more hands-on than a normal robo-advisor, the title is a little misleading. A team of financial professionals does help to assemble your portfolio, but the portfolio itself is managed by the robo-advisor algorithms.
Betterment takes the top spot in terms of access to human financial planners because they offer texting services for all clients. Also, Betterment Digital clients can purchase a variety of goal-based financial planning packages.
Wealthfront does not provide human financial planning services to clients.
Robo-Advisor Selection Wizard – 4 Question Quiz to Help you Choose a Robo-Advisor
Winner: It’s a tie between Betterment and Wealthfront.
Betterment and Wealthfront offer tax-loss harvesting. Ally Invest offers tax-advantaged portfolios which include municipal bond funds.
Wealthfront may have a slight advantage in this category because they offer daily tax-loss harvesting; however, the jury is still out on whether more frequently tax-loss harvesting is a good thing. Still, Wealthfront claims that their more frequent tax-loss harvesting strategy gives investors a chance to save even more money on tax payments.
Winner: Each robo-advisor offers diversified portfolios. The ultimate winner will vary depending upon how well their specific asset allocation matches up with the best performing sectors. The best performers change over time. We are comfortable with the diversification available within each robo-advisors.
- U.S. Total Stock Market
- U.S. Large-Cap, Mid-Cap, and Small-Cap Values
- International: Developed and Emerging Market
- U.S. High Quality Bonds
- U.S. Municipal Bonds
- U.S. Inflation-Protected Bonds
- U.S. High-Yield Corporate Bonds
- U.S. Short-Term Treasury Bonds
- U.S. Short-Term Investment-Grade Bonds
- International Developed and Emerging Market Bonds
Betterment currently has a FREE account management promotion:
- U.S. Total Stock Market
- Foreign Stock – Developed and Emerging Markets
- Dividend Appreciation Stock
- U.S. Treasury Inflation Protected Bonds (TIPs)
- U.S. Government Bonds
- Municipal Bonds
- U.S. Corporate Bonds
- Foreign-Emerging Market Bonds
- Real Estate
- Natural Resources (Energy)
Wealthfront also offers 100+ ETFs investors can use to customize existing or to create new investment portfolios. Clients can also purchase Greystone cryptocurrency funds, typically only available to accredited investors.
Ally Invest Investments
- U.S. Stocks, including S&P 500, Mid-Cap, and Small-Cap
- International Developed and Emerging Market Stocks
- U.S. Treasury Bonds
- U.S. Intermediate Credit Bonds
- Vanguard Mortgage-Backed Securities ETF
- International Bonds
We like both robo-advisors, but they are different. If you prefer access to financial advisors, then Betterment may best for you. If you’re seeking lending, additional ETFs, crypto, and are happy with a top-notch digital digital financial advisor, then Wealthfront may be best. Consider your needs and then choose accordingly.
There are so many excellent robo-advisors that we can’t pick just one. To help you decide, first consider your own needs. Then read reviews and choose one that fits you the best. Our robo-advisor selection wizard may help.
Similar to most robo-advisors, you answer several questions regarding your age, assets, goals and risk tolerance. Then Ally will suggest a group of investment funds that match your needs. Then Ally manages the portfolio for you.
Ally Robo Portfolios vs. Betterment vs. Wealthfront – Which is Best? The Takeaway
Each of these robo-advisors have many benefits that might appeal to a wide range of investors. Investors should be careful to pick the robo that best aligns with their goals. Each robo-advisor offers investment management including rebalancing, lending, and cash management.
Betterment might be for you if you like the idea of a standalone robo-advisor with a long history of good performance. Betterment offers socially responsible investment options and has a Smart Beta portfolio, which has the potential to outperform the market. Another unique benefit to Betterment is its human financial planners who text with all clients. The Digital clients might enjoy the low fee financial planning packages available for a portfolio review, college planning, or other money goals. Wealthier individuals will appreciate Betterment Premium with access to Certified Financial Planners.
You might not like Betterment Premium’s minimum of $100,000 minimum investment.
Wealthfront might be for you if you want an all digital robo-advisor for a reasonable 0.25% AUM management fee. Wealthfront comes with a $500 minimum investment and a 0.25% AUM fee. Investors seeking to customize their investments and add a crypto fund will choose Wealthfront.
For new investors, Wealthfront’s $500 minimum might be a deterrent. There are other robo’s with low minimums who offer ways to invest with little money.
Ally Robo Investing might be for you if you want a robo-advisor backed by a larger financial company. This has the unique benefit of giving you a relationship with Ally Bank, which in turn can provide additional financial services. We like that Ally offers both socially responsible investing and income portfolios. This is great for conservative investors. Although, SoFi Invest also offers a robo advisor, DIY investing, lending and banking, includes financial advisors and has zero management fee.
You might not appreciate Ally Invest if you’re uncomfortable with keeping 30% of your assets in cash, however. Ally Invest only offers free account management to clients who meet this thresh hold; those who have less than 30% assets in cash will pay a 0.30% AUM fee.
Ultimately, we like each of these robo-advisors and believe you can’t go wrong with any of the three.
Read the Betterment Review.
Read the Wealthfront Review.
Read the full Ally Robo Portfolios review.
Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link. That said, I never recommend anything I don’t believe is valuable.