When choosing a robo advisor, the most important factors will vary based on your goals. Here are some common criteria to consider when picking a robo advisor:
- Accounts supported: If you want a specific type of retirement account, it’s important to pick a robo advisor that supports that type of account. Some advisors offer just one or a few accounts, while others offer more broad support for taxable, retirement, custodial and other needs.
- Costs and fees: One of the biggest draws to robo advising is the low cost. However, every advisor has its own pricing model. Shop around to find the right deal for your goals. A slightly higher fee can easily add up to many thousands of dollars over years of investing.
- Investment portfolios: Some robo advisors have just a few pre-designed portfolios. Others customize your portfolio weighting or offer special portfolios for sustainability and other investment priorities.
- Advanced features: Depending on your goals, tax-loss harvesting, and other advanced features may be a draw. If you’re deciding between two or three favorites, this may be a good tie-breaker.