Robo-advisors are an excellent option for investors seeking to streamline their investment management at a lower cost compared to traditional financial advisors. In fact, some robo-advisors don’t charge an annual management fee at all.

Here’s what you need to know about robo-advisors, including five that offer fee-free management.

What is a robo-advisor?

Robo-advisors use algorithms to create an investment portfolio based on your responses to questions about your risk tolerance and investment goals. Many also offer additional features like tax-loss harvesting and automatic rebalancing to enhance your returns and minimize the effort required on your part.

Compared to traditional financial advisors, the best robo-advisors have significantly lower fees and often allow you to start with a modest investment. Some may manage small amounts of money for free, while others charge no management fee at all. However, you will still incur fees for the funds included in your portfolio.

Best free robo-advisors

1. Schwab Intelligent Portfolios

Charles Schwab is well-regarded for its online brokerage services, but it also offers a strong robo-advisor through Schwab Intelligent Portfolios. The basic tier of this service is free and includes portfolio management, automatic rebalancing, and tax-loss harvesting, though tax-loss harvesting requires a minimum of $50,000 in assets.

Schwab constructs portfolios using a wide range of funds, with fees typically ranging from 0.02% to 0.19%. While Schwab incorporates some of its own funds, it also includes funds from cost-efficient providers like Vanguard to keep fees low.

For those seeking additional support, the premium tier offers unlimited access to financial advisors, with a one-time planning fee of $300 and a subsequent monthly fee of $30.

  • Management fee: Free for basic tier
  • Fund fees: 0.02% to 0.19%

2. Fidelity Go

Fidelity Go is an excellent choice for new investors and offers a compelling value proposition. There’s no advisory fee for accounts with assets up to $25,000, and for those exceeding this amount, the annual fee is just 0.35%.

One of the standout features of Fidelity Go is that it uses its own zero-cost mutual funds to construct portfolios, eliminating additional fund fees. This means you’ll pay no fees on assets up to $25,000, making it a great option for those starting with smaller amounts.

  • Management fee: Free for assets up to $25,000
  • Fund fees: Free

3. Interactive Advisors

Interactive Advisors offers a low-cost robo-advisor service, with a unique pricing structure. Managing the portfolio yourself incurs no management fee, which can be appealing for hands-on investors. If you prefer Interactive Advisors to manage your portfolio, the annual fee is just 0.12%, significantly lower than the typical 0.25%.

You can select from a range of themed funds with expense ratios between 0.10% and 0.75%. Interactive Advisors caps fund expenses at 0.75%, ensuring you won’t pay more than this amount. The fund options include various active and passive strategies, industry-specific funds, ESG funds, and more.

  • Management fee: Free if you manage it yourself
  • Fund fees: Capped at 0.75%

4. SoFi Automated Investing

SoFi Automated Investing is one of the most cost-effective robo-advisors available. There is no management fee, so your only expense is the fund expense ratios, which are kept low. Your total annual costs could be around 0.10%, or $10 for every $10,000 invested.

Additionally, you’ll have access to financial advisors who can assist with creating a financial plan and offer guidance on other aspects of your financial life.

  • Management fee: Free
  • Fund fees: 0% to 0.35%

5. Ally Invest Robo Portfolios

Ally Invest Robo Portfolios offers a no-fee advisory option, but there’s a trade-off: choosing the “cash-enhanced” portfolio means keeping 30% of your funds in cash. While this cash earns a competitive interest rate, it may lead to lower returns compared to the market-focused portfolio. If you opt for the fully invested portfolio, you’ll incur an annual fee of 0.30%.

You can select from four portfolio options, each built with low-cost ETFs. Fund fees range from 0.03% to 0.25%, with most being under 0.10%.

  • Management fee: Free for the “cash-enhanced” portfolio
  • Fund fees: 0.03% to 0.25%