There’s a Robo-Advisor With Human Touch for All
Let’s face it, the idea of turning one’s finances over to a robo-advisor is nerve-wracking for some. In fact, you might be skeptical about hiring a totally automated investment manager and would prefer a robo-advisor with human advisor access.
If you want a digital investment advisor with a human touch, you’re not alone. Hybrid robo-advisors are gaining in popularity.
There’s no denying that robo-advisors are helping people make good investment choices as well as, if not better than, traditional financial planners. Often, robo-advisors are more affordable than their human counterparts, and offer 24/7 service for a fraction of the cost of a traditional advisor. Since robo-advisors are effective on their own, it may not be immediately clear why anyone would care about a robo-advisor with human financial advisor.
Yet, if you’re experiencing uncertainty or financial concerns there is comfort in having someone to talk to. And since financial markets fluctuate, these stressful, uncertain moments could come up a lot!
The solution: consider investing in one of these 7 robo-advisors with access to human advisors. Doing so combines the sophisticated investment algorithms of the robo-advisor with the human touch so many of us crave.
Robo-Advisors With a Human Touch
1. Personal Capital
Personal Capital helps investors with a dedicated Certified Financial Planner for each of their clients. Although the basic level of financial service is free. The paid service provides a full slate of investment, retirement and financial management services.
Personal Capital helps clients by guiding them toward smart allocation and investment choices. The platform looks long-term and bases recommendations on all of a client’s portfolios, even those not managed by Personal Capital, so users can expect to get customized advice.
Personal Capital provides tax-loss harvesting, retirement accounts and planning along with net worth calculations and spectacular free investment management reporting software. Clients using the free software have access to automated investment analysis, while paid clients have a dedicated financial advisor and investment management services. The paid service offers individual stocks as well as ETF investing. The investment approach encompasses an equal sector-weight approach with asset allocation in line with your risk comfort level.
Personal Capital offers access to a dedicated financial planner for paid accounts with a minimum balance of $100,000. Fees begin at .79% for the first $3 million, and drop in increments. For accounts over $10,000,000, fees are .49% AUM. Although this fee is higher than some other robo-advisors, it’s lower than the 1.00% to 1.40% fees of many financial advisors.
Betterment offers a few different account types, with their own fee structures. Betterment Digital, which is the basic account, charges only 0.25% AUM for accounts up to $2 million, and no fees for accounts over that amount. Betterment digital recently launched their advisor messaging service for all customers. This texting-based service allows all Betterment clients to message a human financial advisor.
The company recently rolled out a Betterment free portfolio review, for anyone, whether they’re a Betterment customer or not.
However, if you want to have a conversation with a human financial planner by phone or video chat then you’ll need to sign up for Betterment Premium ($100,000 minimum, 0.40% AUM). The premium plan offers unlimited access to their human financial experts.
Betterment allows clients to set up multiple goals and seek investments that help them to reach these goals. They offer multiple types of investments, including Vanguard and iShares ETFs, international and domestic bonds, and market-cap stock ETFs. Clients can open IRAs, individual or joint accounts, and even allow Betterment to manage their workplace 401(k) plan.
Canadian robo-advisor Wealthsimple recently launched in the U.S., with a bang. Offering a robust suite of features and financial advisors for all, this platform is compelling. Wealthsimple is an automated investment management robo-advisor platform, covering everything from portfolio allocation to automatic rebalancing, dividend reinvesting, SRI and Halal investing.
In addition to socially responsible and Halal investment options, Wealthsimple provides a free portfolio review of your outside accounts too.
Wealthsimple also offers investments from 10 distinct asset classes, allowing for an extremely diversified portfolio.
For the basic portfolio there is zero minimum investment amount to get started and a 0.50% management fee. Larger investors with investments greater than $100,000 enjoy a reduced fee of 0.40% and additional perks.
Ellevest just rolled out 2 new service models; Ellevest Digital with a 0.25% AUM fee and Ellevest Premium which charges 0.50% AUM and includes access to both career and financial advisors. Although billed as a robo-advisor for women, the platform is competitive for any investor.
Ellevest is a goals based platform and even at the digital level, allows for texting with financial professionals. Their asset classes and available investment funds are among the most extensive with unique ETFs such as as value equity funds, global bond funds.
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Additional Ellevest distinguishing features include conservative financial scenario projections that account for realities such as taxes and fees, down markets, and other factors, and build layers of conservatism into their projections. Premium clients not only get help from certified financial planners, they can also speak with executive career consultants. The platform analyzes and considers all of your investment accounts, whether they are managed by Ellevest or not.
Like Personal Capital, SigFig focuses on helping clients make the best choices about their existing portfolios. SigFig provides investment tracking in Schwab, TD Ameritrade and Fidelity accounts. This robo-advisor works by analyzing data and science to track and analyze investments.
All SigFig clients get unlimited access to human financial advisors, who can be reached by email, live chat, phone, or through appointment. These financial experts can help provide investment advice, which complements SigFig’s access to portfolios with diversified ETFs, retirement accounts, and stock and bond funds. Another positive for SigFig is the opportunity to have the company manage your funds while they remain in your existing Schwab, Fidelity or TD Ameritrade accounts.
SigFig offers Asset Management Service is available to customers with a minimum $2,000 opening balance; this service is free up to $10,000. After that, they charge 0.25% AUM. There is also the Diversified Income service for customers with balances over $100,000. The Diversified Income portfolio option charges 0.50%. There are no transaction or trading fees, and no commission charges.
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6. TDAmeritrade Essential Portfolios and Personalized Portfolios
In an attempt to meet all client needs, TD Ameritrade offers three digital, robo-advisor choices. The menu of choice includes a variety of services for each price point, but the commonality is human financial advisor access for all.
The basic TD Ameritrade Essential Portfolios Robo-advisor provides five goal-oriented ETF portfolios for a competitive 0.30% management fee and a $5,000 investment minimum. And, you can chat with a financial consultant online or inhouse.
Next, the TD Ameritrade Selective Portfolios Robo-advisor offers more goal-oriented portfolios comprised of ETFs and mutual funds targeting a variety of risk preferences. This level requires a minimum of $25,000 with fees that vary by portfolio and investment amount. Like Essential Portfolios, you can talk with a financial consultant online or inhouse.
The new TD Ameritrade Personalized Portfolios gives you goal planning, a professionally managed portfolio tailored to your individual finances, a dedicated financial consultant, tax loss harvesting and more. Your investment recommendations are made in conjunction with your dedicated financial consultant and Morningstar Investment Management professionals. With a $250,000 minimum, this option is competitive with Personal Capital and charges a 0.90% (or less, depending on portfolio) management fee. Although, unlike TD Ameritrade, all the Personal Capital advisors are licensed Certified Financial Planners.
Clients can open various retirement funds, including IRAs, Trusts, and 401ks; there is also the option to open business accounts and UTMA accounts.
7. Vanguard Personal Advisor Services
Vanguard really hits it out of the park here with its combination of robo-advisor and human elements. This robo-advisor with human touch platform is actually led by a human financial planner. The financial professionals partner with their clients to design, manage and rebalance unique investment portfolios based on each client’s needs and situation.
Vanguard Personal Advisor Services acknowledge that people make emotional decisions regarding their finances, and promise to help clients work around these emotions by providing consistent support and advice. If that means that you want to be as hands off as possible, that’s fine! You can also choose to be more involved in the process. This balance makes Vanguard Personal Advisor Services accessible for all types of investors.
The drawback of Vanguard’s Robo-Advisor with a human touch is that the minimum account size is $50,000. The 0.30% AUM fee is reasonable, although there may be additional commissions and other fees. For all accounts under $500,000, clients have access to a team of advisors. This ensures that clients’ needs are met and investments are taken care of. As your account value increases, the service gets more personal: accounts over $500,000 have a dedicated financial planner.
Which Robo-Advisor Plus Human Financial Advisor is Best?
For the most part, robo-advisors are designed to be self-run; however, having a robo-advisor with human touch can certainly add value to an already impressive investment platform. While some of these advisors – such as Betterment – offer unlimited access to financial planners, the additional fees may not be worth it based on your personal financial situation. If you prefer to invest with a standard robo-advisor or one with an automated financial advisor such as Wealthfront’s Path, you can always hire a fee-only financial planner by the hour.
There’s never a perfect solution to investment management, compare the options and choose the robo-advisor plus human financial advisor that’s best for you.
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Updated; August 15, 2018