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Robo Advisors

Scorecard (2014ye) | Extended List | Graveyard | Links & Articles | Comments

Organization Approx. Assets UM Type Discretion? Cost @$100,000 @$1,000,000 @$10,000,000 Comments
Financial Engines $114,500,000,000 RIA Depends $150/yr advice .2% - .6% $2B market cap 9/2015 WSJ story
Vanguard Personal Advisor Services $21,200,000,000 Custodian Yes 30 bps .30% .30% .25% AUM update, pilot stage
Morningstar Associates $15,223,965,689 RIA Yes Varies mPower buy 2003 (Parent)
Guided Choice $11,842,681,395 RIA Depends $500/year .45% via Plan Sponsor
Schwab Intelligent Portfolios ~$5,000,000,000 Custodian Yes No fees 0 0 0 3/9/2015 launch (1, 2, 3, 4, 5, 6, 7)
Betterment $3,002,939,877 Roboadvisor Yes Multiple options .15% .15% .15% $105M VC 2015
Wealthfront $2,612,809,400 Roboadvisor Yes 25 bps (1st 10K free) .23% .25% .25% $129M VC 2015
Index Fund Advisors $2,565,383,284 RIA Yes Tiered .90% .82% .39% Automated, plus advisor
Promanage $2,125,411,965 RIA Depends Varies Defined Cont. plans
PersonalCapital $1,518,220,789 Roboadvisor Yes Wrap fee tier .89% .89% .67% $104M VC - RIABiz story, FP story
AssetBuilder $686,369,069 RIA Yes Tiered .45% .30% .25%
FutureAdvisor $600,000,000 Roboadvisor Yes Basic Free .50% .50% .50% $21M VC, Blackrock sale
Rebalance IRA $245,000,000 RoboAdvisor Yes $250 set-up + 50 bps .50% .50% .50%
Blooom $156,898,717 Subscription $15/month Story
Acorns $87,000,000 Roboadvisor Yes .25% .25% .25% $32M VC
SigFig $70,000,000 Roboadvisor Yes 25 bps $20M VC, oversee $350B
Smart401k $51,213,508 Robo/Subscription Depends $199.95/year 401K Advisor
Covestor $31,360,231 Subscription Varies $24M VC & sale
WiseBanyan $21,071,513 Roboadvisor Yes Basic Free, Custom 50-100bps $? VC
Hedgeable $19,135,987 RIA Depends Tiered .70% .55% .30% $474,827,789 AUA
Marketriders $5,981,791 Subscription No $149.95/yr oversee $4B
TradeKing Advisors $5,000,000 Roboadvisor Yes 25/50bps M*/Ibbotson wrap
Invessence $3,200,000 RIA Yes 25 bps ($250/yr min) .25% .25% .25%
Upside Advisor $2,272,307* Roboadvisor Yes 25bps .25% .25% .25% $1M VC & sale
E*Trade Online Managed Inv. Port. ? RIA Yes Tier .90% .74% .66% $3.1B AUM 3 products
Edelman Online ? RIA Yes Tier 2.00% 1.40% .71% $14B AUM fraction online (notes)
Robinhood (0 commission broker) N/A Custodian No commissions $13M VC
MotifInvesting N/A Custom Funds $9.95/30 stocks $186M VC
FolioInvesting N/A Custom Funds $290/year
iQuantifi N/A Subscription No $89/year
FinancialGuard N/A Subscription No $15.95/month $2M VC N/A Subscription No Varies, $19/month $69M VC & sales N/A Subscription No Varies
Extended list of United States firms that could loosely be categorized as Robo-Advisors*
  1. AAA (story at RIABiz) via FinanceLogix
  2. Acorns Advisers, LLC
  3. Advizr (provider to advisors)
  4. Amerivest Portfolios (Custodian) per FP (6/11/2015) plans a Robo offering, offers irebal and has multiple deals with other firms (7/3/2015 RIABiz update).
  5. AssetBuilder
  6. Autopilot (CLS Investments/Riskalize - commentary - $90B on platform)
  7. Betterment
  8. Blooom (401K advisor)
  9. Blueleaf
  10. CapitalOneInvesting (story)
  11. CircleBlack (BloombergBlack)
  12. Covestor (subscription)
  13. Edelman Online (discussion)
  14. Ellevest - Ellevate RIABiz Story
  15. E*Trade Online Managed Investment Portfolio
  16. evisor
  17. Fidelity (Custodian) (deals with Betterment and Learnvest and may offer own version)
  18. Financial Engines (usually via plan sponsor)
  19. FinanceLogix (story at RIABiz)
  20. FlexScore
  21. FolioDynamix (Actua technology solutions)
  22. FolioInvesting (subscription)
  23. FTJ FundChoice’s Market Movement Strategies
  24. FutureAdvisor (subscription)
  25. Guided Choice (via plan sponsor)
  26. Hedgeable
  27. Index Fund Advisors (RIA with robo features)
  28. Invessence
  29. iQuantifi
  30. Jemstep (subscription) ($15M VC)
  31. Kivalia
  32. (subscription)
  33. Marketriders (subscription)
  34. Marstone (coming soon)
  35. Morningstar Associates
  36. MotifInvesting
  37. MyMoneyGuide
  38. (Email subscription)
  39. (first offered online advice then "morphed into a TAMP-like platform focused on serving financial advisors")
  40. NestEgg Wealth
  41., previously Veritat Advisors
  42. Nextcapital ("administering $25 billion" free and premium portfolio tools)
  43. PersonalCapital
  44. Plan and Act (subscription)
  45. ProManage LLC (via plan sponsor)
  46. Quovo (platform for financial professionals) (VC)
  47. Rebalance IRA
  48. RightCapital
  49. RiXtrema (
  50. Robinhood (zero commission broker)
  51. Schwab Intelligent Portfolios (Custodian) (no fee)
  52. SciVantage
  53. SigFig (RIABiz commentary 7/22/15)
  54. Smart401k
  55. SmartPlanner ($40 one-time cost report)
  56. TradeKing Advisors (Ibbotson/Morningstar)
  57. Trizic (robo-services for advisors)
  58. US Bank (plans via Barrons)
  59. Upside Advisor (See also Liftoff)
  60. Vanguard Personal Advisor Services
  61. WealthAccess (VC)
  62. (story)
  63. Wealthfront
  64. Wealthminder (story)
  65. Wells Fargo considering developing robo advisor technology
  66. WiseBanyan ("free")
  67. WorthFM

Non-US (ht to Dan Bortolotti for Canadian suggestions)

* Some include the following in the "robo-adviser" category - Target Date Funds, Merrill Edge Select Portfolios, Motley Fool Wealth Management, inStream Solutions, HelloWallet, Everplans, Aspiration, Guardvest, Oranj, and others.


Articles and links

Robo commentary

There has been a flurry of activity and commentary about the "Robo-Advisor" industry recently and it does seem like we are at or near an inflection point. Plus, how robots & algorithms are taking over is a hot topic in general. I started following the field closely a few years ago and had planned to post some link lists and commentary, but for various reasons (including rapidly moving events) I held off commenting, until April 2015. Recently, I've watched the industry developments closely, but in reality the roots of the robo-advisor movement go back nearly 20 years to around the time I initially launched InvestorHome. The first and still dominant firm in the robo-advisor space (which many commentaries seem to inexplicably miss) is in fact Financial Engines. Professor Sharpe actually gave me a heads-up and allowed me to take a look at the firm's web site prior to the official launch. The firm has become extremely successful and eventually went public in 2010. Other early players were mPower, which was founded in 1995 and acquired by Morningstar in 2003, and, which opened for business in 1999, and apparently had over $16 million in VC funding but didn't make it in the long run.

With the recent launches of robo variants by Vanguard (which already has $20 billion in assets) and Schwab (which raised over $500 million in its three weeks), the ultimate question is how specifically do the individual offerings add value and are they likely to be successful in taking market share directly from traditional advisors and brokers, or are many of the other larger players more likely to develop their own tools and/or acquire smaller firms. Several high profile launches were killed, but more recently several of the younger firms have been acquired.

I created the above table and comprehensive list to get a better handle on the players and how they compare. In the table, I have them organized by discretionary assets under management per SEC fillings (note some may not be accurate and I tried to mark those in question). I update this when I come across public information and I have a page here with what appears to be discretionary AUM as of 12/31/2014. Some of the firms cite other metrics, but AUM is useful for some purposes, and is publicly available. Note also that many of these are not offering comparable services and therefore the comparisons are not apples to apples (for instance, some combine human interaction in some form with automated services). Don't hesitate to let me know if I've missed any firms, if any of the metrics are inaccurate, or if you have any other suggestions.

Compiled by Gary Karz, CFA Follow GKarz on Twitter
Host of InvestorHome
Proficient Investment Management, LLC

"Robo-Advisors and The Evolution of Wealth Management" (my 8/5/15 1 hour presentation to CFA Society of Los Angeles)

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