Automatic investment apps can help you with your financial goals without the cost of a human advisor. Weāve considered the best apps based on commissions, account services, portfolio management, and overall quality.
Axos Managed Portfolios offers automated investment with a low fee and customizable portfolio. Investors can easily track their goals and adapt milestones at any time. Plus, Axos rebalances your portfolio to keep your asset allocation on track with your goals at no extra cost.
M1 Finance allows you to invest all your money in any portfolio, or customize it to suit your needs. It then manages your account by maintaining your allocations within the selected Pie through automatic rebalancing. Although it doesnāt offer tax-loss harvesting, it has a feature called ātax minimizationā that enables you to sell asset positions in a tax-favorable way.
What we like
Automated investing with a high level of customization
No trading or management fees or commissions
No initial minimum deposit
You can trade fractional shares
Socially responsible investing portfolio option
What we don't
No tax-loss harvesting
No access to mutual funds, futures, forex, or options investing
An automatic investment app (or robo advisor) is a digital wealth manager that uses algorithms to recommend investment portfolios based on risk tolerance and goals. These apps use technology to deliver financial services without the need for human intervention. They can help automate the process of saving, investing, and managing your portfolio by making recommendations based on your risk tolerance, goals, and current situation.
What can automatic investment apps help you with?
Automatic investment apps offer many benefits, especially for beginners who aren’t familiar with investing or don’t have time to manage their portfolios. Here are how these services can help:
Portfolio rebalancing: These automated apps can monitor your portfolio and make adjustments to align with your investment goals. These apps help keep your assets balanced across various sectors so that you’re better prepared for any economic downturns or market corrections.
Asset allocation: Automatic investment apps will automatically allocate your assets into different asset classes (stocks, bonds, cash, etc.) to create an appropriate mix that matches your goals and risk tolerance. Many of these automated advisors will also suggest a proper level of diversification within each asset class.
Tax loss harvesting: It can help you offset taxes by selling investment losses. This process takes advantage of something called “tax-loss harvesting,” which allows investors to use capital losses from one year to offset gains from another year when calculating their tax bills.
Budgeting and bill management: Automated advisors will help you keep track of your spending and savings goals by providing an easy-to-use tool that lets you set monthly budgets, record expenses, and track your net worth over time. Some also allow you to link other accounts like your bank account or credit card so that everything is in one place. This makes it easy for you to see where all your money is going each month and have a sense of control over where it goes in the future.
Investing education: Some apps will offer educational resources, like videos and articles that provide tips on investing strategies and managing your investments effectively over time. This can be especially helpful if you’re just starting investing.
Who are automatic investment apps best for?
Automatic investment apps can be a great option for beginners to veterans, and some of these include these types of investors:
Retirees: Automated advisors are suitable for retirees because they help you to invest your money in a way that’s appropriate for your age and risk tolerance, taking into account your unique circumstances.
Young investors: Automatic investment apps are also great for young investors who are just starting their careers. Since the fees are low and often waived for qualifying accounts, these robo advisors provide an affordable way for these investors to start saving for retirement or other long-term goals without paying high fees each year.
Save money on commissions or fees: Robo advisors are known for their low fees, which can be as little as 0.25% of assets under management (AUM). If you plan on making regular contributions to your portfolio over time, these minimal fees make it easy to keep investing without breaking the bank.
Limited time: Automated advisors do most of the heavy lifting when managing your investments. This means that they’ll rebalance and adjust your portfolio as necessary ā so all you have to do is sit back and wait for your potential returns.
What are the benefits of automatic investment apps?
Here are some other reasons why automatic investment apps are beneficial:
Lower fees: Automated advisors have much lower investment management fees than traditional financial advisors and human financial planning services. The average fee for robo advisors is 0.25%, which is less than half of what you would pay at the average financial advisor firm.
Financial advice: Robo advisors are not meant to replace human financial planners or advisors. They are meant to provide an entry point for people who may not otherwise be able to afford professional help managing their finances. These advisors will help you understand your options and make informed decisions about where your money should go. They can assist with complex issues like retirement, taxes, and estate planning.
Faster access to financial advice: Automatic investment apps offer clients a convenient way to get started with investing. A traditional advisor usually requires a face-to-face meeting before being hired, which can take weeks or months to schedule. Robo advisors don’t need face-to-face meetings. You simply fill out an online questionnaire about your financial situation and goals, and you’ll have customized advice based on that information.
Customized to your goals: These advisors use an algorithm and computer technology to customize investment portfolios for each client. They use information you provide about your age, income, savings goals, and risk tolerance to build portfolios that meet those needs more closely than would be possible using human advisors alone. This customization leads to greater efficiency in finding appropriate investments and more transparency about fees charged by these programs.
How to choose the best automatic investment apps
Automatic investment apps are becoming more popular. Here are a few factors to consider when considering an app:
Ease of access: How easy is it to get started with your advisor? Is there a phone number or email address you can use? Is it possible to set up an appointment with one of their representatives? If they require you to fill out an online form, ensure it’s easy and minimal information is required.
Fees and minimum investment: Some automatic investment apps do not charge fees, while others may charge as much as 1% yearly. An excellent place to start would be with the one that charges no fees, but if you’re willing to pay for advice, look at other factors such as performance before deciding which one works best for your needs.
Risk tolerance: Robo advisors are suitable for people who want to invest without worrying about market fluctuations and other factors affecting returns over time. They use algorithms and automated processes to manage your assets without human intervention, but you should still know how much risk you can handle before deciding on an automated solution.
