Robo Advisors for Wealthy Investors in 2021
Ten years ago, few investors had heard about robo-advisors. Even fewer investors, especially high net worth investors, used their services.
Today, robo-advisors have become prominent players in investment management. By using mathematical algorithms to set and manage investment portfolios, these platforms have made investing more accessible, affordable and automated. An added benefit of robo-advisors for wealthy individuals is that they can save them from making stupid mistakes, like selling after a market decline, and later buying in at the market peak.
Robo-advisors vary according to their services and the customers they target. Initially developed to guide younger, less experienced, passive investors who appreciate a technology-driven, hands-off approach to wealth building, robo-advisors have broadened to serve high net worth investors as well.
Robo-advisors target investors with various goals, skills and budgets. Some robo-advisors target millennials, while others are for experienced investors looking to automate parts of their portfolios. They are no longer the singular domain of the ‘small investor.’ The sophisticated wealth investor will appreciate the robo-advisors that target high-net-worth investors.
- Robo Advisors for Wealthy Investors in 2021
- Top 5 Robo Advisors for the Wealthy and Mass-Affluent
- 5 Best Robo Advisors for High Net Worth Investors in 2021 at a Glance
- Best Robos for Wealthy Investors Wrap Up
If you are a high-net-worth investor looking to automate part or all of your portfolio by investing in robo-advisors keep reading.
- Six best robo-advisors for high-net-worth investors in 2021
- How human advisors are integrated with investment management
- Annual fees and minimum account balances for each automated investing platform
- Which robo-advisor offers certified financial planners
- Pros and cons of each of the best robo advisors for high-net-worth investors
Top 5 Robo Advisors for the Wealthy and Mass-Affluent
1. Personal Capital – Best for Comprehensive Wealth Planning
Personal Capital is a financial management powerhouse offering two different services:
- Free software and financial tools for personal finance management including retirement planning, cash flow analysis, and net worth tracking.
- Personal Capital Advisors a comprehensive wealth manager with dedicated financial advisors, a reasonable advisory fee, tax and estate planning services.
Over the last decade, Personal Capital Advisors has become so popular with wealthy investors that in July 2020, it was bought by the Colorado-based insurance company Empower Retirement.
Pros and Cons for the High Net Worth Investor
Personal Capital Advisors Pros
- Offers sector weighted allocations, different from other robo-advisors and reputed to guard against excessive portfolio risk and improve returns.
- Has fees that are competitive with traditional financial advisors.
- Provides opportunities for tax-loss harvesting.
- All advisors are Certified Financial Planners.
- Offers tax, estate planning and advanced financial guidance.
- Personal Capital Advisors specifically aims to meet the needs of high-net-worth investors.
Personal Capital Cons
- Account minimum of $100,000 of investable assets to use the Personal Capital Advisors service. Other robo-advisors for wealthy individuals offer lower entry points.
- It is uncertain whether sector weighted investing will outperform marked-weight asset allocation over the long term. Back-testing a theory is no guarantee for future performance.
- There are robo-advisors offering access to personal financial advisors and lower advisory fees.
Minimums and Fees
Personal Capital Wealth Management is available to high-net-worth clients with at least $100,000 to invest. Access to services is tiered according to investment size with those investing $100 to $200 thousand provided a team of financial advisors and a professionally designed ETF portfolio. While investors with over $1,000,000 to invest have access to retirement and tax specialists, private equity, individual stocks and two dedicated personal financial advisors.
Personal Capital wealth management fees span 0.89% AUM for investment assets between $100,000 to $2,999,999. Fees decline as account values increase. At $10 million, investors will pay only 0.49% AUM.
Personal Capital wealth management fees are lower than most financial advisors who average 1.00% AUM.
Even if you don’t choose Personal Capital Advisors to manage your investments you can use their free tools including sophisticated retirement planning, net worth tracking, fees analyzer and more.
Types of Accounts
Personal Capital offers individual and joint investment brokerage accounts. Other account types include Roth, traditional, SEP, and roll-over IRAs as well as trusts.
Free financial management planning and tracking tools. These are phenomenal and available to anyone, whether they are a client, or not.
Personal Capital Advisors features personal financial planning, tax optimization, dynamic portfolio allocation, rebalancing, and cash management.
The sector weight Smart Indexing is unique among robo-advisors and aims to achieve an even exposure to size, style, and economic sector. It means that investment portfolios are better diversified, and there might be increased return potential (learn more about Smart Indexing).
Visit Personal Capital, check out the free tools, and learn more about the Personal Capital Advisors.
2. Betterment – Best for Fee Conscious Investors
Betterment is one of the earliest digital wealth managers and offers a Digital and Premium Service, geared to the high-net-worth investor. It was launched in 2010, aiming to compete with human, financial advisors using algorithms to manage investments.
Betterment Premium includes access to Certified Financial Planners for all clients.
Pros and Cons for the High Net Worth Investor
- Fees, both advisory and fund management, are among the lowest of all digital wealth managers.
- Their investment strategy, supported by modern portfolio theory, maximizes investment returns for any risk tolerance level. They also offer income, smart beta and socially responsible portfolios.
- Betterment offers tax loss harvesting for taxable brokerage accounts to reduce taxes on investment income and capital gains taxes. They claim this helps users net an additional 0.77% return per year.
- Unlimited Certified Financial Planner access for all Betterment Premium clients.
- All customers can text with financial advisors. The Betterment Digital customers will appreciate access to targeted low-fee financial planning sessions human financial planners.
- They do not offer the option to buy individual stocks or invest in real estate funds.
- If you already have an IRA retirement account or brokerage account, you must liquidate the holdings before transferring the cash to Betterment. Although, this is the case with many robo-advisors. According to Betterment, you may incur tax consequences, but the investing benefits they offer would offset any losses.
Minimums and Fees
There is no minimum investment amount to use Betterment Digital. However, to have access to unlimited virtual meetings with a human financial advisor, you must use Betterment Premium, which requires a minimum of $100,000 in investable assets.
Fees differ for Betterment Premium for wealthy investors and the digital service.
- Digital charges 0.25% AUM up to $2 million and 0.15% over $2 million.
- Premium charges 0.40% up to $2 million and 0.30% over $2 million.
Types of Accounts
Betterment offers single and joint taxable brokerage accounts and Roth, traditional, rollover, and SEP IRAs. They also offer trust accounts.
Betterment is among the oldest robo-advisors, providing confidence that it will exist for the long term. The Betterment Premium 0.40% management fee is significantly lower than the average 1.00% AUM fee for traditional financial advisors. That means that more of your money is invested and working for you.
The investment portfolios include several “value” funds, which may result in higher long-term returns. Historically, “value” stocks have outperformed the S&P 500, over long periods of time. Although, from 2010 through 2020, this wasn’t the case. Betterment’s investing strategy is designed to minimize taxes and the investment committee selects funds with the best risk-adjusted returns for the lowest fee.
Premium customers benefit from a combination of algorithmic and human advice.
Visit Betterment and sign up with the link below for the free investment management promotion.
3. Vanguard Personal Advisor – Best for Investors Who Like to Customize Their Investments
Vanguard robo-advisors are part of the Vanguard Group which is among the largest mutual fund and ETF provider. The company offers two tiers of investment management, Vanguard Digital Advisor and Personal Advisor Services.
Vanguard Personal Advisor Services is for wealthier investors and includes access to human financial advisors who work with clients to craft an investment portfolio that aligns with your goals and investment style.
Pros and Cons of Vanguard Personal Advisor
- An algorithm-based investment portfolio created in concert with a human financial advisor.
- Active and/or passively managed funds. This means you and your advisor can include mutual funds and ETFs, predominantly sourced from the firm’s stable of highly regarded Vanguard funds.
- Access to the Vanguard slate of services.
- Among the lowest management fee robo-advisors – Personal Financial Advisors charges 0.30% AUM.
- Comparatively low minimum of $50,000 for wealth investors. The minimum can include funds from all Vanguard accounts combined.
- Accounts invested mainly in Vanguard funds.
- Not the lowest fee robo-advisor with access to financial advisors. That would be SoFi Invest, with fee-free investment management and financial advisor access.
- Tax loss harvesting is not an automated feature of Vanguard, and is done on a case-by-case basis.
Minimums and Fees
To use Vanguard Personal Advisor services, you need $50,000 to invest.
Vanguard uses a sliding scale with a 0.30% AUM fee for assets up to $5 million. Fees decline for the the next $5 to $10 million management fee of 0.20% AUM and continue to decline with greater account values.
These fees are comparatively low compared to those of other robo-advisors.
Types of Accounts
Vanguard Personal Advisor Services offers individual and joint investment accounts, Roth, traditional, SEP, and rollover IRAs and trusts.
Investors with portfolios of $500,000 and over are appointed a dedicated financial advisor who assists with all matters related to the investment account. Investors who have less than $500,000 invested don’t have access to a dedicated advisor but can virtually chat with Vanguard’s group of professional financial advisors.
Vanguard also provides case-by-case tax-loss harvesting, and they allocate your assets to minimize your tax bill.
4. Ellevest – Best for Women Investors
Ellevest is a robo-advisor specifically designed to meet the investing requirements of women. Sally Krawcheck, CEO made it her mission to empower women financially after realizing that the investing industry has historically operated in ways that focused more on men.
Investing is still predominantly the domain of white, middle class males. Don’t believe me? Just Google ‘best investors’ and see what comes up.
Anyhow, Ellevest worked with women to create an investing platform that offers the guidance they need along with conservative projections to consider women’s work histories and lifespans.
Pros and Cons of Ellevest
- It is a robo advisor created ‘by women, for women’ with realistic assumptions plugged into retirement and wealth creation calculators.
- Very low subscription based pricing with tiered service levels.
- No minimum initial investment amount, although certain amounts are needed to begin investing.
- Discounted financial planner and career coach meetings.
- High and ultra high net worth investors with $1 million+ assets gain access to a team of financial professionals for advanced wealth management services for tiered AUM fees.
- The new iteration of United Income, Capital One Investing is new and unproven.
- Fees are generally higher than competitors.
- Multi-goal investing and retirement accounts are only available at the higher service tiers. Although, all of the pricing is quite affordable.
- Customer service is available only during business hours.
- Investors seeking tax-loss harvesting may find that the tax minimization methodology doesn’t work to their advantage.
- Private wealth management fees begin at 0.90% AUM, which is on the high side for hybrid robo-advisors.
- No joint brokerage or trust accounts. This is a disadvantage for the high net worth investor.
Minimums and Fees
There is no minimum investment amount required. To invest in specific portfolios, you’ll need from $1 to $240.
Ellevest fees are very low, starting at $1 per month for an Essential account, $5 per month for a Plus account, and $9 per month for an Executive account.
For an additional fee, Ellevest offers access to financial advisors and career coaches at discounted rates. We believe that it’s efficient to pay for only the advice that you need. The Executive plan which costs $97 per year, offers greater services and the highest discount of 50% off for sessions with the career and financial coaches. Wealthier investors are also provided access to private wealth management and a dedicated financial advisor.
Private Wealth Management is offered for investors with $1 million or more and tiered fees begin at 0.90% AUM and decline as asset levels increase.
Types of Accounts
Ellevest offers an individual taxable brokerage account. Retirement accounts include Roth, traditional, and SEP IRAs.
Ellevest has many exciting features, but here we will mention two that are especially important for women investors irrespective of their net worth. First, this robo-advisor uses a goal-oriented investment approach which, research shows, is especially important for women – women tend to invest for specific future goals. And second, the methodologies and projections used are dressed in layers of conservatism which ups the likelihood that your money will last for your life, and beyond. While doing this, the platform still uses Modern Portfolio Theory to maximize the expected returns at each risk level.
Another standout feature is that Ellevest impact investing portfolios prefer companies with women in leadership, higher sustainability and ethical standards, and companies that support women-owned businesses and those in need.
Ellevest has among the best educational portals of stand alone robo-advisors, which is important for women who may lack a strong investment background.
5. Zacks Advantage – Best for Growth Investors
Zacks Advantage is an actively managed robo-advisor that has performed consistently well and in 2020 held the top spot in the Access to Advisor category on the Robo Report. It is a wealth management boutique owned by Zacks Investment Research.
Zacks Advantage operates on the basis that the best predictor of stock prices is earnings. It is a robo-advisor that uses a combination of technology and active wealth management. Zacks uses its own proprietary research to rotate ETFs, and invests in only the best performing categories. Zacks Advantage focuses on long-term investment performance and downside risk protection. The platform strives to beat market returns.
Pros and Cons of Zacks Advantage
- Access to live advisors for all clients.
- Low minimum investment amount relative to other robo-advisors for high-net-worth investors.
- Diverse investment choices from a broad selection of asset classes including preferred stocks and MLPs.
- Connection to Zacks Investment Research – which is among the most highly regarded in the investment industry.
- It is not the robo-advisor for you if you are looking for a passive investing strategy.
Minimums and Fees
Zacks Advantage has a minimum investment amount of $25,000, quite a low amount, in contrast with our other robo-advisors for high net worth clients. Fees range from 0.70% for accounts valued between $25,000 and $99,999. Accounts worth between $100,000 and $249,999 will pay 0.50% of AUM. While accounts worth more than $250,000 pay a reasonable fee of 0.35% AUM.
Types of Accounts
This robo-advisor offers individual and joint taxable accounts, Roth, traditional and rollover IRAs, custodial accounts, and trusts.
Zacks Advantage offers access to financial advisors to all investors and combines algorithms and active investment management. This robo-advisor also provides a broad range of investment asset classes based on Zacks Investment Research. The active management approach provides the opportunity for investors to outperform the market.
Still, I believe that their most prominent standout feature is the use of downside risk protection: rising higher than the rising tide of the market is good but holding fast when the tide is falling is divine.
5 Best Robo Advisors for High Net Worth Investors in 2021 at a Glance
Here are the six best robo-advisors for high-net-worth investors in 2021 compared along five key features, what is it best for, investment minimums, fees, types of account they offer and their standout feature.
|Best for…||Minimums||Fees||Accounts||Stands out for…|
|Personal Capital Advisors||Access to advanced wealth management services||$100,000||Between 0.89% and 0.49%||Individual and joint taxable, Roth, traditional and rollover IRAs; trusts||Smart Indexing evening exposure to size, style, and economic sector.|
|Betterment||Income, smart beta and SRI investing||Betterment Premium $100,000||Betterment Premium between 0.40% and 0.30%||Individual and joint taxable, Roth, traditional, SEP and rollover IRAs; trusts||Low fees and value funds.|
|Vanguard Personal Advisor Services||Investors looking for automation with human touch||$50,000||Between 0.30% and 0.05%||Individual and joint taxable, Roth, traditional, SEP and rollover IRAs; trusts||Collaborative portfolio construction between advisor and client.|
|Ellevest||Women investors||No minimum||$1, $5 or $9 per month. Additional fees apply for advanced services.||Individual and joint taxable, Roth, traditional, SEP and rollover IRAs||Low pricing, pay for what you need financial advise and career coaches.|
|Zacks Advantage||Growth investors seeking active management||$25,000||Between 0.70% and 0.35%||Individual and joint taxable, Roth, traditional, and rollover IRAs; trusts; custodial accounts||All clients have access to financial advisors; builds on Zacks Investment Research.|
Best Robos for Wealthy Investors Wrap Up
We highlighted the key features and standout characteristics of the 5 best robo-advisors for high-net-worth investors in 2021. But, the best robo-advisor for you depends on your goals, your financial situation, and preference regarding financial advice. Consider fees, as those will minimize the dollars that go into the markets. Understand the robos investment strategy and funds, and determine if they align with your own. Be careful if you’re using past performance to influence your choice. Markets are fickle, and a popular sector or investment style today, might be a losing approach tomorrow.
Personal Capital Advisors Corporation (“PCAC”) compensates Wealth Media, LLC. (“Company”) for new leads. (“Company”) is not an investment client of PCAC.