Which Robo-Advisor is Best For You?
There are two common reasons people like robo-advisors. And Ally Invest, 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, they have lower minimum investment requirements that 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 Invest Managed 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.
- Which Robo-Advisor is Best For You?
- Features at a Glance
- Ally Invest vs. Betterment vs. Wealthfront – Overview
- Ally Invest vs. Betterment vs. Wealthfront – Top Features
- Ally Invest vs. Betterment vs. Wealthfront – Who Benefits?
- Ally Invest vs. Betterment vs. Wealthfront – Deep Dive
- Ally Invest vs. Betterment vs. Wealthfront – Which is Best? The Takeaway
*This article contains affiliate links to help pay for this website. That said, our reviews are held to the highest standards of honesty.
Features at a Glance
|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% for portfolios with less than 30% cash.||Digital: 0.25% AUM for accounts up to $2 million; 0.15% AUM fees over $2 million. |
Premium: 0.40% AUM for accounts up to $2 million; 0.30% fee over $2 million.
|0.25% (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. For investors with more than $100K, tax-optimized stock investing.|
|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. Risk parity fund available.|
|Contact & Investing Advice||Phone 7am - 10pm EST - 7 days per week - Email-24/7||Phone M-F 9am-6pm 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||Free Account Management Promotion||$5,000 Managed for Free|
Ally Invest vs. Betterment vs. Wealthfront – Overview
What is Ally Invest Cash Enhanced Managed Portfolios?
Ally Invest was founded in 2016 when Ally Bank acquired TradeKing. As Ally Invest grew, they reimagined TradeKing into a new robo-advisor that focuses on self-directed investing in a variety of investment options.
Because Ally Invest is part of the Ally Bank family, this robo-advisor as in the same camp as the Fidelity and Schwab robo-advisors Fidelity Go and Schwab Intelligent Portfolios. But with Ally Invest’s low minimum investment requirement and nonexistent fees, 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 most assets under management.
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 high-yield cash accounts and loans.
Wealthfront is also a very low-frill robo-advisor, which offers only one level of service and no human financial planning support. But, their PATH financial advisor is hands-down the most comprehensive digital financial advisor online.
Ally Invest vs. Betterment vs. Wealthfront – Top Features
Ally Invest Top Features
- Goals-based robo-advisor
- Access to Ally Bank
- Diverse investment options
- Socially responsible investments
- Tax-optimization portfolios
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
- Individual stock investing for higher value accounts
Ally Invest vs. Betterment vs. Wealthfront – Who Benefits?
All 3 Robo’s are Best for:
Investors who want a small startup cost, other services 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 Invest 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.
Ally Invest is Best for:
For those seeking a robo-advisor with other, non-investing features, and free investment management. Ally Invest Cash Enhanced Managed Portfolios may be the best option for investors who want an “income” portfolio.
Ally Invest 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.
Wealthfront is Best for:
All-digital platform with daily tax-loss harvesting, single stock selling service, and individual stock investing for high account values.
Ally Invest 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 Invest 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. 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.
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.
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
- 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
- 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)
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 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 Invest vs. Betterment vs. Wealthfront – Which is Best? The Takeaway
Each of these robo-advisors has many benefits that can appeal to a wide range of investors. They’re not all-encompassing robo-advisors, though, and investors should be careful to pick the robo that best aligns with their goals.
Ally Invest 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 Invest offers both socially responsible inveting and income portfolios. This is great for conservative investors.
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.
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. Another unique benefit to Betterment is its human financial planners who text with clients.
You might not like Betterment’s fees in comparison to the other robos on this list, though. Their Premium account requires a $100,000 minimum investment and comes with a 0.40% AUM fee.
Wealthfront might be for you if you want a no-frills robo-advisor for one flat fee. Wealthfront comes with a $500 minimum investment and a 0.25% AUM fee.
That said Wealthfront is still reasonably priced – and much cheaper than a human counterpart. Wealthfront also offers different services, like checking accounts and loans.
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.
Ultimately, we like each of these robo-advisors and believe you can’t go wrong with any of the three.
Read the full Ally Invest review.
Read the full Betterment Review.
Read the full Wealthfront 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.