Online financial advisors can help you with your financial goals. Weâve considered the best financial advisors 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 doesnât offer tax-loss harvesting, it has a feature called âtax minimizationâ 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
Online financial advisors are third-party providers that help people invest their money. They use software to crunch numbers, determine an optimal portfolio based on your risk tolerance and other factors, and suggest investments that fit those goals. They may also provide estate planning, insurance, and tax planning services.
This can come in handy if you’re looking for investment advice but don’t have time to learn about stocks and bonds. Online financial advisors usually offer their services at a relatively low cost (sometimes even free), so it doesn’t hurt to try them â especially if there’s no minimum amount required to open an account.
What can online financial advisors help you with?
Online financial advisors help you with a range of financial planning services. These include:
Investment management: Online financial advisors offer various services, including investment management and portfolio management. Some provide only a limited range of investment options, while others offer access to the entire market. Most provide some kind of plan or strategy based on your risk tolerance, time horizon, and other factors.
Money management: These financial advisors often offer budgeting software that allows you to see where your money is going each month to make adjustments as needed. Some budgeting programs also help with savings by recommending how much to save each month based on an income goal or annual savings target.
Debt management: A debt management plan is a formal arrangement you make with your creditors to pay off your debts over time. The plan usually involves making reduced monthly payments, which are then distributed among your creditors according to a pre-arranged schedule.
Retirement planning: These advisors will provide financial strategies for saving, investing, and how much money you will need to sustain yourself during retirement. They’ll also recommend which investment vehicles, such as IRAs and 401(k)s make sense based on your situation.
Insurance planning: Insurance planning isn’t just about buying life insurance â it’s about ensuring you have the right amount of coverage for everything in your life, whether it’s home or health insurance. An online financial advisor should be able to help you determine what types of policies will benefit you most and how much coverage each policy should provide.
Estate planning: Estate planning is arranging for the distribution of assets at the time of death. Estate planning aims to protect your family and the assets you’ve accumulated over a lifetime. It is essential to financial planning because it deals with transferring assets upon death, which may be worth more than half a million dollars. It’s also important to consider your family’s needs and wishes when making decisions about the distribution of assets.
Tax planning: Tax planning is a process that helps you take advantage of government programs and deductions to minimize your tax liability throughout the year by taking advantage of deductions, exclusions, and credits when possible. Financial planners can help clients make choices that improve their bottom line by reducing taxes paid throughout their lives.
What are the benefits of online financial advisors?
Online financial advisors can provide several benefits, including:
Low cost: Online financial advisors can charge lower fees than traditional financial advisors, and they might not charge commissions or account maintenance fees.
Convenience: You no longer need to go into the office to meet with an advisor or open an account at a bank branch. Instead, you can complete everything online from the comfort of your home. This allows you to save time and avoid dealing with traffic or long lines at the bank branch.
Scheduling: Online financial advisors help you design a plan for your future and manage your money on a long-term basis. They’ll also provide ongoing support and keep you updated on any changes in policies or regulations that could impact your investments. All of this is done from the comfort of your home, so there’s no need to take time away from work or family obligations to meet with someone face-to-face.
How to choose the best online financial advisors
Here are a few factors to consider when choosing an online financial advisor:
Find a real fiduciary:A fiduciary is required to act in your best interests. If an advisor is not required, they are likely working on commission or incentive-based compensation. This may make it hard to know whether they have your best interests. A fiduciary will be upfront about compensation and fees and never put their interests ahead of yours.
Check those credentials:You should also ensure that the advisor youâre considering has the proper credentials and licenses. Certified Financial Planners (CFPs) must pass a comprehensive exam covering many personal finance areas, including investments, taxes, and insurance. They must also abide by a code of ethics that prohibits conflicts of interest, such as recommending products that pay them higher commissions than others with similar features or risk profiles.
Understand how the advisor gets paid: Not all advisors charge the same way, so itâs important to understand how they get paid before you hire them. Some advisors charge an hourly rate, while others charge by commission or a flat fee. Flat fees are often lower than commission-based compensation, but other fees may come into play later. Look for advisors who offer transparent fee structures and who donât sell products that arenât in your best interest.
Search for clarity:Look at your investments and ensure no hidden fees or commissions are associated. If there are, find out how much they cost and if theyâre worth it. Itâs also important to know what kind of investment strategy your advisor is using â passive or active, for example â and whether this strategy is based on research that has been proven over time, and if so, how long.
Look for experience: An experienced advisor will likely know more about tax laws and regulations and industry trends that could affect your portfolio over time. They should also be able to offer guidance on managing your investments in different market conditions to help you achieve your goals.
