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Robo Advisors

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Organization Assets UM ye2014 Type Discretion? Cost @$100,000 @$1,000,000 @$10,000,000 Comments
Financial Engines $104,426,127,739 RIA Depends $150/yr advice up to .75% $2B market cap
Morningstar Associates $15,223,965,689 RIA Yes Varies mPower buy 2003 and ByAllAccounts buy in 2014 (Parent)
Guided Choice $11,842,681,395 RIA Depends $500/year .45% via Plan Sponsor
Vanguard Personal Advisor Services $10,100,000,000 Custodian Yes 30 bps .30% .30% .25%
Index Fund Advisors $2,629,393,282 RIA Yes Tiered .90% .82% .39% Automated, plus advisor
Promanage $2,125,411,965 RIA Depends Varies Defined Cont. plans
Wealthfront $2,015,008,422 Roboadvisor Yes 25 bps (1st 10K free) .23% .25% .25% $129M VC
Betterment $1,707,060,805 Roboadvisor Yes Multiple options .15% .15% .15% $105M VC
PersonalCapital $1,248,300,000 Roboadvisor Yes Wrap fee tier .89% .89% .67% $104M VC
AssetBuilder $686,369,069 RIA Yes Tiered .45% .30% .25%
Rebalance IRA $245,000,000 RoboAdvisor Yes $250 set-up + 50 bps .50% .50% .50%
FutureAdvisor $232,000,000? Roboadvisor Yes Basic Free .50% .50% .50% $21M VC
SigFig $70,000,000 Roboadvisor Yes 25 bps $20M VC
Smart401k $51,213,508 Robo/Subscription Depends $199.95/year 401K Advisor
Blooom $54,498,553 Subscription $15/month ESRA Advisor
Covestor $31,360,231 Subscription Varies $24M VC
Acorns $26,300,000 Roboadvisor Yes .25% .25% .25% $32M VC
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 Investment Portfolio ? 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)
Schwab Intelligent Portfolios N/A Custodian Yes No fees 0 0 0 3/9/2015 launch X-Ray
Robinhood (zero 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, advises on $3B 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. Acorns Advisers, LLC
  2. Amerivest Portfolios (Custodian) offers irebal free to TDA advisors and has deals with Autopilot, Jemstep, NestEgg Wealth, Trizic & Upside Advisor.
  3. AssetBuilder
  4. Autopilot (CLS Investments)
  5. Betterment
  6. Blooom (401K advisor)
  7. Blueleaf
  8. CircleBlack (BloombergBlack)
  9. Covestor (subscription)
  10. Edelman Online (discussion)
  11. E*Trade Online Managed Investment Portfolio
  12. Fidelity (Custodian) (deals with Betterment and Learnvest and may offer own version)
  13. Financial Engines (usually via plan sponsor)
  14. FinancialGuard
  15. FlexScore
  16. FolioDynamix (Actua technology solutions)
  17. FolioInvesting (subscription)
  18. FutureAdvisor (subscription)
  19. Guided Choice (via plan sponsor)
  20. Hedgeable
  21. Index Fund Advisors (RIA with robo features)
  22. Invessence
  23. iQuantifi
  24. Jemstep (subscription) ($15M VC)
  25. Kivalia
  26. (subscription)
  27. Marketriders (subscription)
  28. Morningstar Associates
  29. MotifInvesting
  30. MyMoneyGuide
  31. (Email subscription)
  32. NestEgg Wealth
  33., previously Veritat Advisors
  34. Nextcapital (free and premium portfolio tools)
  35. PersonalCapital
  36. Plan and Act (subscription)
  37. ProManage LLC (via plan sponsor)
  38. Quovo (platform for financial professionals) (VC)
  39. Rebalance IRA
  40. RiXtrema (
  41. Robinhood (zero commission broker)
  42. Schwab Intelligent Portfolios (Custodian) (no fee)
  43. SigFig
  44. Smart401k
  45. SmartPlanner ($40 one-time cost report)
  46. TradeKing Advisors (Ibbotson/Morningstar)
  47. Trizic (robo-services for advisors)
  48. Upside Advisor (See also Liftoff)
  49. Vanguard Personal Advisor Services
  50. WealthAccess (VC)
  51. Wealthfront
  52. Wealthminder (story)
  53. WiseBanyan ("free")

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, 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 somewhat of 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 now. 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 robo-advisor (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 $17 billion in assets under management) and Schwab (which raised over $500 million in three weeks), the very real question that needs to be asked is how specifically do the offerings add value and are they likely to be successful in taking market share directly from traditional brokers/advisors, 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 as of 12/31/2014 per SEC fillings (note some may not be accurate and I tried to mark those in question). 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 cost comparisons are not apples to apples (for instance, some combine personal services 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

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