Learn more about robo-advisors before you open an account

What does a robo-advisor do?

Robo-advisors automate investment management by using computer algorithms to build and manage an investment portfolio for you, based on your goals and your tolerance for risk. Since portfolio management is handled by software rather than a human financial advisor, robo-advisors charge lower fees, which can translate to higher long-term returns for investors. A few of the advisors on our list even offer completely free portfolio management.

Robo-advisor services range from automatic rebalancing to tax optimization, and require little to no human interaction. A robo-advisor might be a good fit if you prefer to be largely hands-off with your investments and you don’t have the kind of complex financial situation that requires a direct relationship with a human financial advisor.

That said, many providers offer access to human advisors available for questions related to account management or long-term investment planning — though these services may cost more.

How do you open a robo-advisor account?

Opening a robo-advisor account is very similar to opening a brokerage account or bank account: You’ll provide some personal information and then link an existing account from which you can transfer money to fund the new account. The primary difference is in most cases, robo-advisors will take you through an onboarding quiz to help determine how to invest your portfolio. These quizzes generally ask about your investment goals, risk tolerance and time horizon, and the robo-advisor will use your answers to build the most optimal portfolio for you.

How do robo-advisors get paid?

Robo-advisors are paid through their account management fee. This is usually shown as a percentage, such as 0.25%. This means the fee is a percentage of the money that you invest. For example, if you put $1,000 into a robo-advisor investment account, and it charges a 0.25% fee, you’d pay $2.50 for that year’s worth of investment management. If you put in $100,000 you’d pay $250. Both of those figures are significantly lower than what they would be if you worked with a traditional financial advisor.

Expense ratios are different from management fees: They are not paid to the robo-advisor, but to the people and institutions that manage the funds you’re invested in.

What factors should you consider when picking the best robo-advisors?

Here’s what you’ll want to look at — and what we look at when curating this list:

Management fees. This is what you’ll pay annually to have an account at a robo-advisor. See our calculator below to help you analyze these.

Expense ratios. These are like management fees, only they’re paid not to the robo-advisor, but to the investments the robo-advisor uses. Mutual funds, index funds and exchange-traded funds all charge this annual fee to cover the costs of running the fund.

Account types. Investment accounts fall into two general categories: Retirement accounts, such as IRAs and 401(k)s, that offer tax advantages while adhering to certain rules; and taxable accounts, where there are no specific tax advantages but also no limits on contributions or distributions.

Investments. Most robo-advisors use low-cost index funds and ETFs.

Rebalancing. Portfolios are fluid, and market fluctuations can cause the mix of investments you hold to get out of sync with your goals. Rebalancing brings that allocation back to its original mix.

It’s been a trying year for stock investors: Worries about DeepSeek’s artificial intelligence disruption and policy uncertainty around tariffs have sent the US stock market on a roller-coaster ride in 2025.

Where has the “smart money” been finding investment opportunities in this year’s volatile market?

To find out, we looked at the latest portfolios of some of the best fund managers. To isolate the top stock-pickers among current active fund managers, we screened on the following:

Actively managed funds that land in US large-value, US large-blend, or US large-growth Morningstar Categories.

Funds with at least one share class earning Morningstar Medalist Ratings of Gold, Silver, or Bronze with 100% analyst coverage.

Funds that hold 50 stocks or fewer as of their most recently reported portfolios.

Twenty-nine separate fund portfolios passed our screen. We then compared the latest portfolios of these funds with their portfolios three months before to determine what stocks these managers have been buying. Most of the portfolios we examined were as of March 31, 2025, which means the purchases featured here don’t include any buying activity during the tariff-induced market selloff in April and the subsequent rebound.

Some of the stocks that top managers have been buying look fairly valued today, according to Morningstar, but there are some undervalued stocks in the mix, too.

10 Stocks That the Best Fund Managers Are Buying in 2025

Here are the stocks that top managers have been investing in this year.

Alphabet GOOGL Microsoft MSFT Amazon.com AMZN Nvidia NVDA Goldman Sachs GS Sherwin-Williams SHW UnitedHealth Group UNH Caterpillar CAT Home Depot HD Salesforce CRM

Several large-growth technology and tech-related stocks pepper the list, which isn’t surprising, given that their underperformance for much of the year made their valuations more attractive.

Here’s a little bit about each stock pick, along with some commentary from the Morningstar analysts who follow the companies. All data is as of May 16, 2025.

Alphabet

Number of Best Managers Buying the Stock: 7

Morningstar Price/Fair Value: 0.70

Morningstar Economic Moat Rating: Wide

Morningstar Uncertainty Rating: Medium

Morningstar Style Box: Large Value

Sector: Communication Services

The best fund managers’ top stock pick during the latest quarter was Alphabet, one of five technology-related names on our list. Morningstar thinks this wide-moat stock is undervalued today.

Here’s what Morningstar analyst Malik Ahmed Khan had to say after Alphabet reported earnings:

Alphabet kicked off 2025 with a set of solid results, with the firm’s sales and operating margins growing 12% and 230 basis points year over year, respectively. Google Cloud continues to be the firm’s growth engine, growing 28% year over year. Why it matters: Despite the turbulent macroenvironment as well as ongoing antitrust cases and tough competition in generative AI, we were impressed by Alphabet’s continued strong execution, with the firm showing clear progress on the generative AI monetization front. In particular, we were impressed with the wide range of monetization angles the firm is creating by leveraging AI, including Google Cloud, Gemini, AI Overviews, and improved ad targeting tools provided to advertisers.

Beyond advertising, the firm’s public cloud business remains supply-constrained, leading to the deceleration in growth to 28% from 30% in the previous quarter. We expect Google Cloud growth to reaccelerate as additional capacity comes online in the second half of 2025. The bottom line: We maintain our $237 per share fair value estimate for wide-moat Alphabet and continue to view the stock as materially undervalued. While we believe investor concerns around a tariff-induced digital ad spending slowdown and antitrust-related impact on Alphabet’s business are valid, we think the selloff in the firm’s shares has been overly punitive, creating an attractive buying opportunity.

We reiterate our view that Alphabet will be able to navigate the antitrust cases against it without material value destruction in its businesses. Also, we expect the firm’s diversified end-market and geographic exposure to insulate its ad business from a sharp decline in ad spending. Coming up: Despite the ongoing macroeconomic uncertainty, Alphabet restated its intention to spend $75 billion in capital expenditure in 2025. We believe the firm has a lucrative long-term opportunity in generative AI and view these investments as sound. Malik Ahmed Khan, Morningstar equity analyst

Read Morningstar’s full report on Alphabet.

Microsoft

Number of Best Managers Buying the Stock: 8

Morningstar Price/Fair Value: 0.90

Morningstar Economic Moat Rating: Wide

Morningstar Uncertainty Rating: Medium

Morningstar Style Box: Large Core

Sector: Technology

In addition to being among the top buys of the best fund managers this year, Microsoft is also the most widely held stock pick among the group. Microsoft stock looks 10% undervalued relative to Morningstar’s fair value estimate of $505.

Here’s what Morningstar senior analyst Dan Romanoff had to say after Microsoft reported earnings:

Microsoft’s third-quarter results topped the high end of the firm’s guidance. Revenue increased 13% year over year to $70.1 billion, compared with the high end of guidance of $68.7 billion, while operating margin was 45.7%, compared with the high end of guidance at 44.6%. Why it matters: Results are good across the board, with upside to our estimates on the top and bottom lines. Revenue for all segments was above the high end of guidance. Critically, we see very impressive performance within Azure, in traditional and artificial intelligence workloads. In our view, near-term demand indicators are robust. Commercial bookings grew a solid 17% year over year in constant currency based on surging Azure commitments from OpenAI and other large deals. Remaining performance obligations increased 34% year over year to $315 billion.

Demand for Azure AI services is surging, which is a long-term positive. While Azure remains capacity-constrained, AI performed better than internal expectations, while traditional workloads rebounded. Azure growth was 35% in constant currency for the quarter and topped guidance. The bottom line: We raise our fair value estimate for wide-moat Microsoft to $505 per share, from $490 previously, based on good results and guidance, while our long-term estimates remain unchanged. We view shares as attractive, and the stock remains one of our top picks. Coming up: Overall guidance is impressive in this environment. Microsoft provided better-than-expected guidance on the top and bottom lines, including $73.7 billion in revenue, 43.4% operating margin, and $3.34 in earnings per share at the midpoints. The firm notes no change in customer behavior based on tariffs or the Department of Government Efficiency. Big picture: We see results reinforcing our long-term thesis, which centers on the expansion of hybrid cloud environments, the proliferation of artificial intelligence, and Azure. We center our growth estimates around Azure, Microsoft 365 E5 migration, and traction with the Power Platform. Dan Romanoff, Morningstar senior analyst

Read Morningstar’s full report on Microsoft.

Top Fund Managers Are Buying These 3 Cheap Stocks Some of the best investors recently added these undervalued stocks to their portfolios. 2m 54s Watch

Amazon.com

Number of Best Managers Buying the Stock: 6

Morningstar Price/Fair Value: 0.86

Morningstar Economic Moat Rating: Wide

Morningstar Uncertainty Rating: Medium

Morningstar Style Box: Large Core

Sector: Consumer Cyclical

Wide-moat Amazon is another popular tech-related stock pick with our managers. Amazon stock looks undervalued, trading 14% below our $240 fair value estimate.

Here’s what Morningstar’s Romanoff had to say about Amazon’s recent results:

Amazon reported first-quarter results that beat the high end of guidance on both the top and bottom lines. Revenue grew by 10% year over year in constant currency to $155.7 billion, while operating margin was 11.8% versus 10.7% a year ago. Currency hurt sales growth by $1.4 billion. Why it matters: Results were generally good, with upside broadly on the top and bottom lines, which we think is positive in the face of looming tariffs. We see some prebuying behavior ahead of tariffs, which is worth monitoring if the tariff situation persists beyond the second quarter. Amazon produced upside to revenue in each of the segments relative to our model, except for third-party sellers, which was slightly light. Consumer buying behavior has not really changed in the face of tariffs, even through April. Advertising was impressive and helped buoy overall results.

While there could be some mild disappointment around solid AWS results given Azure’s very strong results on April 30, we note AWS faces the same capacity constraints and still produced upside to our estimate in the first quarter. Artificial intelligence workloads are growing in excess of 100% year over year on AWS. The bottom line: We maintain our fair value estimate of $240 per share as we see good results in conjunction with mixed guidance, and we see shares as attractive. Coming up: Overall guidance is mixed, with revenue solid and profitability light relative to our model. Satellite launch costs for Project Kuiper will likely pressure margins for a couple of quarters, while new AWS capacity coming online later this year will have a similar impact. We do not think these will have a major impact on Amazon’s long-term profitability, but we have already been modelling relatively flat margins for 2025, so we have not made meaningful changes.

Considering the tariff situation, we see guidance as solid. Second-quarter guidance includes revenue of $159 billion to $164 billion, with operating income of $13.0 billion to $17.5 billion. Dan Romanoff, Morningstar senior equity analyst

Read Morningstar’s full report on Amazon.com.

Nvidia

Number of Best Managers Buying the Stock: 7

Morningstar Price/Fair Value: 1.08

Morningstar Economic Moat Rating: Wide

Morningstar Uncertainty Rating: Very High

Morningstar Style Box: Large Growth

Sector: Technology

The first overvalued stock on our list of top buys from the best managers, Nvidia stock trades 8% above our $125 fair value estimate, though the stock is trading below its 2024 highs.

Morningstar strategist Brian Colello had this to say after Nvidia announced in April that it was taking a sizable write-off because of heightened China restrictions.

Nvidia expects to incur $5.5 billion of write-offs associated with its H20 artificial intelligence GPU, as the US has restricted its export to China. The H20 was crafted specifically for the Chinese market to allow Nvidia to circumvent prior US restrictions. Why it matters: The US government has placed another round of restrictions on Nvidia as the country strives to lead the AI race. China has shrunk to about 10% of Nvidia’s revenue from 20%, and we now expect it to go to close to zero, and we don’t foresee a turnaround anytime soon. The $5.5 billion of write-offs will relate to inventory and purchase commitments for the H20, as we assume that these less capable chips might not find a home with customers in developed markets. The bottom line: We lowered our fair value estimate for wide-moat Nvidia to $125 from $130 as we cut our revenue estimates to exclude China now and in the future. We retain our Very High Uncertainty Rating. We lower our revenue estimates for the July quarter by 10% and carry forward our preexisting growth rates across a smaller revenue base. Partially offsetting these cuts is an increase in our long-term revenue estimates as we remain optimistic about AI buildouts in developed markets.

Tariffs and geopolitical tensions remain a near-term and long-term concern for Nvidia and other chipmakers, while the future of AI expansion isn’t crystal clear, either. These factors, among others, underpin our Very High Uncertainty Rating. China is just one of many moving pieces. Coming up: We expect to gain more insight into these restrictions, along with tariffs and the overall state of AI spending, during Nvidia’s earnings call in late May. In the meantime, we doubt that businesses are slowing their AI investments, which might support ongoing AI GPU sales through 2025. Brian Colello, Morningstar strategist

Read Morningstar’s full report on Nvidia.

Goldman Sachs

Number of Best Managers Buying the Stock: 3

Morningstar Price/Fair Value: 1.26

Morningstar Economic Moat Rating: Narrow

Morningstar Uncertainty Rating: Medium

Morningstar Style Box: Large Value

Sector: Financial Services

Goldman Sachs is the only financial-services name on our list of stocks that top investors have been investing in. Shares of the narrow-moat company trade at a 26% premium to our $490 fair value estimate.

Here’s Morningstar senior equity analyst Brett Horn‘s take on Goldman’s recent earnings report:

Narrow-moat-rated Goldman Sachs reported a strong start to the year as near-constant shifts in market sentiment bred heightened volatility that produced exceptional trading revenue, effectively masking the tepid deal-making environment that is posing headwinds for investment banking. Despite strong quarterly results and a recent selloff alongside broader equity markets, we continue to see shares being modestly overvalued as we maintain our $490 fair value estimate. The company reported net income to common shareholders of $4.6 billion, or $14.12 per diluted share, on $15.1 billion of net revenue. Investment banking revenue declined 7% sequentially and 8% year over year, as heightened macroeconomic uncertainty stalled the cyclical recovery in deal-making activity that has been underway. Despite these muted results, the global banking and markets segment holistically booked net revenue gains of 26% sequentially and 10% year over year, as continued developments in tariff policies spiked market volatility, enabling the fixed-income, currency, and commodities and equities businesses to generate historic revenues as clients repositioned their portfolios. While we forecast some normalization over the long run for both the trading and investment banking businesses, which we believe are currently overearning and underearning, respectively, we note that both trends may persist in the short term until markets attain more clarity surrounding shifts in global trade policy and their second-order geopolitical impacts. The asset and wealth management segment has become increasingly material for the consolidated entity, which we view favorably, as management fees exhibit less cyclicality than investment banking fees. Segment results this quarter were mixed, as net revenue contraction of 22% sequentially and 3% year over year was worse than expected, considering assets are about 65% fixed income, but continued net inflows brought assets under supervision up to $3.17 trillion, increasing its long-run earnings potential. Brett Horn, Morningstar senior equity analyst

Read Morningstar’s full report on Goldman Sachs.

Sherwin-Williams

Number of Best Managers Buying the Stock: 3

Morningstar Price/Fair Value: 1.41

Morningstar Economic Moat Rating: Wide

Morningstar Uncertainty Rating: Medium

Morningstar Style Box: Large Core

Sector: Basic Materials

The most overvalued company on our list of stocks top managers have been buying, Sherwin-Williams is trading 41% above our $258 fair value estimate.

Morningstar equity analyst Spencer Liberman has this to say about the company’s first-quarter results:

Wide-moat Sherwin-Williams reported first-quarter results that were largely in line with our expectations. Net sales declined 1% year over year, as growth in the paint stores group was offset by weakness in the consumer brands and performance coatings groups. The paint stores group continues to impress as demand for Sherwin’s paint products in residential and commercial end markets drives growth. While the threat of tariffs and a slowdown in gross domestic product growth remain a concern for Sherwin, the company’s direct exposure to tariffs is limited as it produces most paints and coatings in the regions where they are sold. As such, we’ve increased our fair value estimate to $258 from $247 per share. The paint stores group started the year strong, reporting a 2.5% increase in sales while the segment’s operating margin expanded 120 basis points to 18.4%. Residential repaint and marine end markets continue to perform well, with marine showing consistent strength that has persisted for some time now. Management noted that the pipeline for marine remains robust as well, which we think will help offset weakness in do-it-yourself markets. DIY remained muted, and higher interest rates continue to limit large-scale projects that tend to require some form of financing to complete. Looking ahead, we expect resilient demand in repaint and marine will buoy volumes as weakness in DIY likely persists. Sherwin’s performance-coatings group reported underwhelming results in the first quarter as industrial end markets remain constrained. Net sales declined almost 5% year over year while the segment reported a 13.3% operating margin, an 80-basis-point decline from a year ago. This was mainly driven by weakness in general industrial and automotive refinish end markets, but was partially offset by strength in packaging. We expect pricing to remain pressured during the year because of softness in industrial and automotive refinish, but packaging demand should offer some relief. Spencer Liberman, Morningstar equity analyst

Read Morningstar’s full report about Sherwin-Williams.

UnitedHealth Group

Number of Best Managers Buying the Stock: 7

Morningstar Price/Fair Value: 0.55

Morningstar Economic Moat Rating: Narrow

Morningstar Uncertainty Rating: High

Morningstar Style Box: Large Value

Sector: Healthcare

The most undervalued stock pick among our top managers last quarter, UnitedHealth looks 45% undervalued relative to Morningstar’s $530 fair value estimate. The company has been plagued with negative news this year, including the removal of its CEO and weak results.

Here’s what Morningstar senior equity analyst Julie Utterback had to say in mid-May after media reports surfaced that a criminal probe had been launched into the company’s Medicare Advantage plan:

The Wall Street Journal reported on May 14 that a criminal component had been added to an already-reported civil investigation of UnitedHealth’s risk-rating practices in Medicare Advantage. UnitedHealth later responded that it had not been notified of the criminal probe. Why it matters: After the media report but before UnitedHealth’s rebuttal, shares were down another 8% in after-hours trading, crashing further in a dismal week for investors that already saw its CEO leave and 2025 guidance suspended. The potential for Medicare fraud at the largest Medicare Advantage insurer is spooking investors, and if wrongdoing is eventually found, the monetary damages could be stiff. Assertions under the previous CEO Andrew Witty that risk assessments would solve its current profit challenges look dubious.

The diversity of UnitedHealth’s operations should shield it somewhat. About half of its profits come from medical insurance, and only about 15% of its global medical membership comes from Medicare Advantage, which looks disproportionately low relative to recent share movement. The bottom line: After raising our Uncertainty Rating to High following the management and guidance announcement, we are making no further changes to our views of narrow-moat UnitedHealth. Positively, UnitedHealth maintains a conservative balance sheet, including gross debt/EBITDA of roughly 2 times and credit ratings in the single-A category. Financially, we suspect the company should be able to ride out gathering storms.

Shares appear significantly undervalued to us at these levels, but investors should be aware of the elevated uncertainty and potential for share volatility, especially given ongoing regulatory challenges broadly for the industry and specifically for UnitedHealth. Bears say: UnitedHealth shares have fallen by half in just a month, and current prices imply a further deterioration of profits, representing nearly half of its medical insurance operations in the near term. Julie Utterback, Morningstar senior equity analyst

Read Morningstar’s full report on UnitedHealth Group.

Caterpillar

Number of Best Managers Buying the Stock: 3

Morningstar price/fair value: 0.84

Morningstar Economic Moat Rating: Wide

Morningstar Uncertainty Rating: Medium

Morningstar Style Box: Large Value

Sector: Industrials

The fourth large-value name on our list of stocks that top managers were buying last quarter, Caterpillar looks undervalued: The stock trades 16% below our $422 fair value estimate.

Here’s what Morningstar equity analyst George Maglares thought of Caterpillar’s recent earnings release:

Caterpillar’s first-quarter 2025 results showed some green shoots across its portfolio with a $5 billion backlog increase and a slightly better full-year outlook compared with last quarter, excluding a potential tariff impact. The earnings call was CEO Jim Umpleby’s farewell performance as the company announced on April 15 that he is handing the reins to COO Joe Creed and transitioning to executive chairman. Creed has been a key player in Caterpillar’s efforts to diversify end markets and capture more of its profit pool via services, which we expect to continue. The highlight was the potential impact of tariffs on 2025 and beyond. Management presented a range of scenarios, with an unmitigated tariff impact/economic downturn causing a modest revenue decline in 2025 and operating margins of approximately 18% (closer to the midrange of guidance for sales at these levels). Specifically, it estimated an impact of $250 million to $350 million per quarter (of which China accounts for approximately 50%) in the absence of mitigating actions, explaining most of the margin erosion. Management seemed reluctant to detail “mitigating actions” because Caterpillar began implementing “merchandising” programs (effectively price discounting) to bolster sales amid weaker demand in the back half of last year. As such, price increases don’t appear to be a viable near-term option owing to the customer dynamics. While Umpleby expressed cautious optimism for a better deal on tariffs, Creed acknowledged that Caterpillar would have to make substantial investments that are “very difficult to change or pivot,” if the status quo doesn’t improve. Other highlights include robust and visible tailwinds for power generation solutions to data centers, signals of confidence through capital allocation via $3.7 billion of share repurchases, and ongoing commitment to its “dividend aristocrat” status. We leave our fair value estimate of $422 per share unchanged but will monitor the tariff situation closely. George Maglares, Morningstar equity analyst

Read Morningstar’s full report on Caterpillar.

Home Depot

Number of Best Managers Buying the Stock: 4

Morningstar Price/Fair Value: 1.25

Morningstar Economic Moat Rating: Wide

Morningstar Uncertainty Rating: Low

Morningstar Style Box: Large Value

Sector: Consumer Cyclical

Another overvalued stock on our list of stocks that top managers have been buying, Home Depot stock is trading 25% above our fair value estimate of $305.

Morningstar senior equity analyst Jaime Katz has this to say about Home Depot’s business before earnings:

Home Depot is the world’s largest home improvement retailer, delivering more than $159 billion in revenue in 2024. The firm’s wide economic moat rating is based on its economies of scale and brand equity. Home Depot has realized strong historical returns as a result of its scale, operational excellence, and concise merchandising, all of which remain key tenets underlying our modest margin expansion forecast. Its flexible distribution network should help elevate the firm’s brand intangible asset, with faster time to delivery improving the do-it-yourself experience and market delivery centers catering to the pro business. We believe the success of ongoing initiatives should allow for operating margin expansion back to prepandemic levels in the longer term, despite intermittent inflationary pressures and macroeconomic turbulence. Over time, Home Depot should continue to capture sales growth, bolstered by an aging housing stock, rising home prices, and a shortage in home inventory (consumers updating the homes they remain in). Other internal catalysts for top-line growth could stem from the firm’s efficient supply chain, improved merchandising technology, and penetration of adjacent customer product segments (such as the maintenance, repair, and operations, or MRO, market through the acquisition of HD Supply, or the roofer market via its tie-up with SRS Distribution). Expansion of close categories (like textiles) as well as existing ones (for example, electric tools) could also drive demand. In our opinion, perpetual improvements in the omnichannel experience should support the firm’s competitive position, even if existing-home sales and turnover remain depressed in the near term. The commitment to better merchandising and an efficient supply chain has led the firm to achieve an adjusted operating margin and returns on invested capital, including goodwill, of 13.8% and 21%, respectively, in 2024. Additionally, Home Depot’s focus on cross-selling products in both its DIY and its pro channel should support stable pricing and volatility in the sales base, helping achieve a modest operating margin lift, with our forecast averaging 14.2% over the next decade. Jaime Katz, Morningstar senior equity analyst

Read Morningstar’s full report on Home Depot.

Salesforce

Number of Best Managers Buying the Stock: 5

Morningstar Price/Fair Value: 0.92

Morningstar Economic Moat Rating: Wide

Morningstar Uncertainty Rating: High

Morningstar Style Box: Large Core

Sector: Technology

Salesforce rounds out our list of stocks that the best managers have been investing in. This slightly undervalued tech stock is trading 8% below our $315 fair value estimate.

Here’s what Morningstar’s Romanoff had to say about Salesforce’s business ahead of earnings:

Salesforce has established itself as the clear leader in software for all aspects of the customer relationship journey. As the company has matured and growth has slowed, profitability has improved, and the capital allocation strategy has evolved. We think the combination of these factors should continue to compound good earnings growth for years to come. After introducing the software-as-a-service model to the world, Salesforce has assembled a front-office empire that it can build on for years to come, in our view. Sales Cloud represents the original Salesforce automation product, which streamlined process management for sales leads and opportunities, contact and account data, process tracking, approvals, and territory tracking. Salesforce’s critical differentiator was that the software was accessed through a web browser and delivered over the internet, thus inventing the SaaS software delivery model. Service Cloud brings in customer service applications, and Marketing Cloud delivers marketing automation solutions. Finally, we think Data Cloud helps tie the offerings together. These solutions encompass nearly all aspects of customer acquisition and retention and, in our view, are mission-critical. Salesforce Platform also offers customers a platform-as-a-service solution, complete with the AppExchange, as a way to rapidly create and distribute apps. We believe this further strengthens the substantial community of Salesforce users. In our view, Salesforce will benefit further from natural cross-selling among its clouds, upselling more robust features within product lines, vertical solutions, pricing actions, and international growth. Salesforce is widely considered a leader in each of its served markets, which is attractive on its own, but the tight integration among the solutions and the natural fit they have with one another make for a powerful value proposition. To that end, more than half of enterprise customers use multiple clouds. Further, customer retention has gradually improved over time and is better than 92%, which we expect to grind higher still in the coming years. Dan Romanoff, Morningstar senior equity analyst

Read Morningstar’s full report on Salesforce.

How Do We Determine Which Stocks the Best Managers Are Buying?

To determine which stocks top managers are investing in, we compared the latest portfolios of these funds with their portfolios three months before. We then calculated a “buy score” for each stock, which is a weighted average that allows us to make apples-to-apples comparisons of the most-purchased stocks. One or two managers making large purchases of a stock could lead to the same buy score as many managers purchasing small amounts of a stock.

Morningstar senior editor Margaret Giles and lead developer Lauren Solberg developed the methodologies and tools required to create this content.

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Traditional in-person investment advice can be expensive. Robo-advisors offer a cheaper solution through automated portfolio rebalancing and investment opportunities. Robo-advisors are increasingly popular investment platforms that offer a cost-effective alternative to advisor-managed portfolios.

Investment managers and brokers have been using robo-advisors since the 1980s. But now, consumers can use these robo platforms directly, making investing more affordable and accessible for beginners.

Here are the best robo-advisors Business Insider’s personal finance editors picked in 2025.

Best Robo-Advisors

Betterment Investing: Best overall robo-advisor

Fidelity Go: Best for budget investors

Wealthfront Investing: Best for diversification

Acorns: Best robo-advisor for beginners

SoFi Robo Investing: Best robo-advisor for CFP access

E*TRADE: Best robo-advisor for knowledge seekers

Vanguard: Best robo-advisor for retirement savers

Best Overall

Betterment is our top pick for the best overall robo-advisor. It’s at the top of our list for being cost-effective, trustworthy, and offering a diverse selection of securities, including stock and bond ETFs.

Beginners can easily build a diversified investment portfolio tailored to their risk tolerance and financial goals. Strategies like socially responsible, high-growth, and tax-advantaged investing are readily available.

Users can unlock access to CFPs, but unlimited guidance is only available through the premium plan (which requires a $100,000 minimum).

Betterment protects users’ personal data and accounts through strong browser encryption, fraud monitoring, and biometric authentication. The platform’s dedicated customer support team is available 24/7 by phone, email, or virtual assistant.

Betterment has a rating of 4.8/5 on the Apple Store and 4.7/5 on Google Play.

Pros of Betterment

$0 minimum requirement to open an account

Tax-loss harvesting available

Goal-based financial planning and availability of human advisors

Cons of Betterment

If you don’t have at least $100,000, you won’t get unlimited access to a CFP; you’ll have to pay for each consultation.

Best for Budget Investors

Fidelity Go is a highly-regarded robo-advisor offering cost-effective portfolios best for budget investors who prioritize low-cost investing strategies. Fidelity Go portfolios are personalized to your goals and financial situation.

Fidelity Go seamlessly integrates with other Fidelity accounts and has no minimum account requirement. For only $10, get free portfolio management for balances under $25,000. If your account balance exceeds $25,000, you may even be able to access guidance from human advisors for no extra cost.

One of the best parts about Fidelity Go is its low fees. The platform relies on mutual funds (Fidelity Flex mutual funds) that don’t contain expense ratios.

It provides users with an accessible, mobile trading experience with access to tax-efficient strategies, goal-based planning, and powerful trading tools and solutions.

Fidelity is one of the safest online brokerages, with top-notch security features and a long history of trustworthiness.

Fidelity has a rating of 4.8/5 on the Apple Store and 4.6/5 on Google Play.

Pros of Fidelity Go

$0 minimum requirement to open an account

Fidelity Flex mutual funds have no expense ratios

Access to human advisors

Cons of Fidelity Go

Fidelity Go doesn’t offer tax-loss harvesting

Must have at least $25,000 in your account to unlock human advisors

Best for Diversification

Wealthfront Investing is a pioneer in the robo-advisor space, similar to Betterment. It is the best robo-advisor for portfolio diversification as it offers a huge selection of investable securities.

Wealthfront has the largest automated investment selection, providing passive investors access to competitively priced ETFs, index funds, crypto trusts, portfolio lines of credit, and bond ETFs. It is also a stand-out option for socially responsible investing through its Blackrock ESG funds that track socially responsible indexes defined by MSCI.

If you have at least $100,000 to invest, you can access Wealthfront’s US direct indexing and risk parity investing strategies. Direct indexing allows you to harvest losses on individual stocks to reduce your overall tax liability.

Additional features of Wealthfront include tax-loss harvesting, smart beta investing (which pairs with US Direct Indexing to outperform an existing market index through tax efficiency, enhanced diversification, and reduced risk), and risk parity portfolios.

If you’re interested in adding cryptocurrencies to your asset allocation, Wealthfront mitigates portfolio risk by only allowing a 10% allocation for crypto trusts.

Wealthfront also offers an automated high-yield bond portfolio in which hands-off traders can get a customized low-cost bond ETF portfolio. Wealthfront Automated Bond Portfolio pays a 4.85% yield, which is even higher than Wealthfront’s cash account, which pays up to 4.50% APY.

Wealthfront has a rating of 4.8/5 on the Apple Store and 4.8/5 on Google Play.

Pros of Wealthfront

Automated bond portfolio

ETFs, index funds, an automated bond portfolio, ESG funds, crypto trusts, and portfolio lines of credit

Auto-rebalancing and tax-loss harvesting available

Smart-beta strategies

Cons of Wealthfront

$500 minimum requirement to open an account

No ongoing human financial guidance

Must spend at least $100,000 to use strategies like direct indexing and risk parity

Best for Beginners

If you are new to investing and prefer to manage your investments on your mobile device, Acorns is a standout investment app designed for investors with little to no trading experience. Although its investment selection and trading tools are limited, it is a great choice for those who lack the ability or willingness to invest large sums of money from the get-go.

You can start investing with only $5 and set recurring contributions to build your portfolio slowly over the long term. The Acorns Round-Ups feature can automatically invest spare change from your transactions when you link your credit or debit card to your Acorns brokerage account.

You can open an individual brokerage, IRA (Acorns Later), custodial account (Acorns Early Invest), and emergency fund all under one login. However, access to certain accounts, investment strategies, and reward-earning opportunities is limited by membership tier.

You must be an Acorns Gold member to access Acorns Early accounts, hand-picked stocks and ETFs, and a 3% match on IRA contributions (1% match with Silver membership). A Gold membership costs $12 a month.

Acorns is not the best option for more experienced traders, active traders, or those wanting greater investment opportunities beyond stocks and ETFs.

Acorns has a rating of 4.7/5 on the Apple Store and 4.7/5 on Google Play.

Pros of Acorns

Only $5 to start investing

Streamlined interface suitable for beginners

Up to a 3% match on IRA contributions (must be a Gold member)

Micro-investing strategies

Cons of Acorns

Limited to stocks and ETFs

No access to human financial advisors

Must pay at least $3 a month to use Acorns

Best for CFP Access

If you’re looking for affordable guidance from financial planners, SoFi Robo Investing is the way to go. SoFi’s low-cost automated trading platform offers several perks: It has a $0 account minimum, doesn’t charge any fees, and provides CFP access with SoFi Plus membership.

Like several other investment platforms mentioned in this list, SoFi allows you to also invest on your own, thanks to SoFi’s active investing accounts.

As a streamlined and robust robo-advisor, SoFi invests your funds into a diversified mix of ETFs eligible for automatic portfolio rebalancing and goal-planning tools.

SoFi’s support multiple accounts, including individual and joint accounts, traditional IRAs, Roth IRAs, SEP IRAs, and 401(k) rollovers.

SoFi Invest has a rating of 4.8/5 on the Apple Store and 3.9/5 on Google Play.

Pros of SoFi

$0 minimum requirement to open an account

Complimentary access to vetted financial planners (unlimited access with SoFi Plus)

Cons of SoFi

SoFi Active Invest® automated portfolios don’t offer tax-loss harvesting

Limited to US-based securities

Best for Knowledge Seekers

E*TRADE Core Portfolios is E*TRADE’s robo-advisor, requiring a $500 minimum and a 0.30% annual fee. E*TRADE is our top pick for knowledge seekers as it offers an extensive and detailed library of educational content for investors to learn and grow from.

With E*TRADE’s Knowledge, investors get access to expert commentary, informational articles, weekly market recaps, and educational webinars, which are viable for beginners, advanced traders, or those interested in becoming more knowledgeable on personal finance topics like retirement planning, tax planning, and insurance.

You can access tax minimization strategies, top-notch security, and robust investment options (e.g., automating individual and joint accounts, custodial accounts, and IRAs).

E*TRADE’s automated investing mobile app allows commission-free trading of stocks, ETFs, mutual funds, and options. The app lets users manage their money, transfer cash, deposit checks, and pay bills.

The robo-advisor also includes Bloomberg TV, which gives investors third-party research and news updates.

E*TRADE has a rating of 4.7/5 on the Apple Store and 4.7/5 on Google Play.

Pros of E*TRADE

$0 minimum to open a self-directed brokerage account

In-depth library of educational content and market news through E*TRADE Knowledge

Powerful trading tools, including interactive charts, market trackers, and paper trading

Cons of E*TRADE

$500 minimum requirement to open a robo-advisor account

You can’t speak with a human advisor unless you have at least $25,000

No tax-loss harvesting

Best for Retirement Savers

Vanguard Digital Advisor is the best robo-advisor for retirement savers. Digital Advisor is one of two automated investing accounts Vanguard provides (the Vanguard Personal Advisor Services account is the other option).

You can build your retirement savings with a Vanguard IRA (traditional, Roth, rollover, SEP, and inherited) and invest in one of the portfolio mixes: all-index, active/index, or ETFs.

Vanguard Digital Advisor is a stand-out option for retirement planning because of its financial planning resources, low fees, and tax-efficient funds and rebalancing tools. Additionally, investors can access detailed educational guides on topics like:

Social Security

Retirement withdrawal strategies

Investing in retirement

Medicare and factoring in healthcare costs

Vanguard is renowned for its first-rate customer service and user experience. It requires a $100 minimum balance and has some of the lowest expense ratios in the industry (ranging from 0.03 to 0.46%)

This robo-advisor mainly allocates your assets across four Vanguard ETFs for easy portfolio diversification and tax-efficient investing. These include the Vanguard Total Stock Market ETF, Vanguard Total International Stock ETF, Vanguard Total Bond Market ETF, and Vanguard Total International Bond ETF.

Vanguard has a rating of 4.7/5 on the Apple Store and 3.5/5 on Google Play.

Pros of Vanguard

Tax-loss harvesting available

Low-expense ratios for Vanguard ETFs

Retirement-specific financial planning tools and resources available

Cons of Vanguard

Doesn’t offer complimentary CFP access

$100 minimum requirement to open an account

What Is a Robo-Advisor?

Robo-advisor technology has revolutionized investing, making financial guidance more accessible than ever. Essentially, robo-advisors are automated brokerage accounts that create and manage investment portfolios on behalf of users. Some robo-advisors use more advanced AI to personalize investment strategies, but that is not always the case. Consumer-facing robo-advisors have been around for about 15 years, well before the current AI boom.

One of the main selling points for robo-advisors is that they’re automated, so you don’t have to think about that investment actively. However, if you’re looking to choose certain shares, you may be disappointed with the level of freedom a robo-advisor will give you.

Although robo-advice isn’t as personalized as advice from human advisors, the average retail investor can now access fundamental investing strategies and knowledge without burning a hole in their wallet.

However, trust in these automated portfolios differs across generations. According to a MagnifyMoney survey, millennials and Gen Z investors are far more likely to trust robo-advisors than Boomers and Gen X.

How Robo-Advisors Work

Robo-advisors use algorithms and questionnaires to determine which personalized investment strategies makes the most sense. While some platforms will only ask basic questions, others will pose a more detailed range of queries to better identify the client’s specific financial needs and provide regulated advice.

“An investor typically provides information about his or her risk tolerance, time horizon, and investing goals, and based upon that information, a portfolio is recommended, usually comprised of low-cost ETFs, that are managed and rebalanced as needed,” says Keith Denerstein, a broker at J.P. Morgan.

Robo-advisors are typically created by professional financial advisors who implement long-term growth earnings and risk-adjusted strategies into the algorithms.

Automated platforms manage portfolios by keeping each asset (usually stock and bond ETFs) within a certain percentage range.

For example, let’s say that your robo-advisor has allocated 20% of your portfolio toward the Vanguard S&P 500 ETF. The robo-advisor will give it a little wiggle room, such as plus or minus 5%. If the Vanguard allocation drops below 15% or exceeds 25%, it will rebalance your portfolio.

The Evolution of Robo-Advisors

The first robo-advisors are generally considered to have started around 2008, and in 2010, Betterment Investing and Wealthfront Investing launched the first robo-advisors available to the general public.

Since then, robo-advisors have continued to grow in popularity among investing novices and passive investors. And as the technology evolves, so does the terminology.

“Over the past few years, the ‘catch-all’ term ‘robo-advisor’ has become increasingly obsolete, with firms preferring more specific terms such as Digital Wealth Service, Automated Advice, Hybrid Advisor or even Bionic Advisor to describe better what they actually do,” says Simon Bussy, consulting director at Behavior Consulting Limited.

Today, robo-advisors fall into two basic categories: those that are exclusively online — like Acorns — and those offered by brick-and-mortar brokerages and financial service firms, like Charles Schwab automated investing.

Traditional firms tend to cater to investors with a bit more capital, often requiring higher minimum deposits and charging higher fees — but also sometimes providing additional services, like access to live support from financial professionals.

Additional Features and Services

Robo-advisors come with various helpful features and services that help beginners and passive investors make informed investment decisions without being overwhelmed.

Some of the best services and features of robo-advisors include:

ESG funds

Tax-loss harvesting

Curated ETF portfolios

Long-term portfolio projections

Automatic rebalancing

Goal-based investing strategies

Mobile access

Robo-advisors commonly offer top-level security features that match industry standards. These features include encryption technology, third-party testing, risk disclosures, and vetted investments.

Benefits of Using a Robo-Advisor

Inexpensive Compared With Human Advisors

Robo-advisors generally cost less than human financial advisors and investment managers. For example, automated investing apps charge roughly 0.25-0.50% of investment portfolios annually. Traditional wealth managers typically charge around 1% of assets under management (AUM).

“The typical retail investor using a robo-advisor can potentially benefit from professional portfolio management at a cost far lower than that traditionally charged by a live advisor,” says Denerstein.

Lower Account Minimums and Fees

Other benefits of automated investment advice include lower account minimums than traditional brokerages and investment managers. For example, Vanguard has a minimum for its robo-advisor service, while some financial advisors have minimums that are several thousands of dollars, if not hundreds of thousands.

Beginner-Friendly Investing Strategies

Because they do all the choosing and investing, robo-advisor platforms don’t require much from investors. You don’t need specialized knowledge of stock markets, P/E ratios, balance sheets, or anything else. While a financial advisor could provide similar help, a robo-advisor is often more beginner-friendly by nature of the lower minimums and automated nature.

Limitations of Robo-advisors

Limited Control

Robo-advisors mainly invest in inexpensive ETFs to keep costs low. However, most services don’t let users select which funds are included in their portfolios beyond general guidance, like selecting ESG-oriented funds. Nor do they typically invest in individual stocks, bonds, or alternate investments.

That said, some online brokerages, like Acorns Invest, have started to offer DIY investing by letting some users choose individual stocks and gain exposure to cryptocurrencies.

Limited Flexibility Beyond Pre-Built Portfolios

Robo-advisors apply general criteria when recommending portfolios. They often shoehorn customers into one of their preexisting model portfolios (i.e., growth, income, growth + income) based on the basic risk tolerance, income profile, and rudimentary investment goals indicated in your questionnaire.

“That’s why human wealth managers and financial planners argue that ‘robos’ cannot replace them — they are not sophisticated enough to understand the whole picture or provide fully-rounded advice,” says Bussy.

Lack of Personalized Advice and Human Assistance

Robo-advisors usually don’t provide clients with a direct line to any human help. The customer service reps, if any, are mainly there for logistical questions or platform errors.

That said, investing through a robo-advisor doesn’t prevent you from seeking financial consultation from another brokerage or broker firm. But you will have to pay the additional cost for this service.

Getting Started with a Robo-Advisor

Whether you’re opening your first brokerage account, funding your retirement, or saving toward a larger goal, there’s often a robo-advisor suitable for your needs. But you’ll need to do your homework first to find the best automated investing platform for your situation.

Choosing The Right Robo-Advisor

Choosing the best robo-advisor platform for you depends:

What you want to get out of these tools

How much you’re willing to pay The kinds of securities you’re looking to invest in

Make sure to review platforms with a critical eye and consider the full costs of robo-advisors before opening an account. Also, while robo-advisors are generally geared toward beginners, some platforms have more advanced features better suited for experienced investors.

Automated investing isn’t for everyone, especially folks wanting a more personal touch or customized approach.

Why You Should Trust Us

Rebecca Zissar/Business insider

We interviewed the following investing experts to see what they had to say about the best robo-advisors.

Sandra Cho , RIA, wealth manager, and CEO of Pointwealth Capital Management

, RIA, wealth manager, and CEO of Pointwealth Capital Management Tessa Campbell, Investment and retirement reporter at Personal Finance Insider

What are the advantages/disadvantages of investing through a robo-advisor?

Sandra Cho:

“Advantages include:

On-demand general guidance: In my experience, robo-advisors are best used as a starting point to determine risk tolerance and get a handle on your financial situation and a broad roadmap to what you need to do. Sometimes you just need a catalyst to get moving in the right direction.

Simple to use.

Feeling of control: There is no concern about hurting a person’s feelings if you don’t take their advice, and you don’t feel rushed or pressured.”

“Disadvantages of using a robo-advisor

No one is second-guessing you. Sometimes, you need someone to read between the lines. Maybe you think you are an aggressive investor who can tolerate high risk, but you pull all your money out the minute your portfolio goes down. The risk tolerance result I get if clients complete the questionnaire alone is significantly different from when I walk them through it.

Lack of EQ, or emotional IQ. EQ is sometimes more important than IQ. It’s hard for a robo-advisor also to tell you what you don’t know that you don’t know. It’s hard for a robo-advisor to help you work through concerns, fears, and anxiety and help keep you invested through turbulent markets and life events that inevitably affect your financial path.”

Tessa Campbell:

“Robo-advisors do the hard, time-consuming part of investing for you. Once you set your goals, risk tolerance, and time horizon, a robo-advisor can create a customized investment portfolio based on those characteristics. This makes these platforms accessible to beginners and ideal for passive investors.

“Robo-advisors also tend to be the better option for folks wanting low-cost investing as most robo-advisors mainly trade ETFs.

“However, robo-advisors can be limiting. You won’t get the same level of control or influence over your assets as you would with self-directed investing or a professionally managed platform. If you want to pick and choose how you invest your money, then a robo-advisor isn’t the best option for you.”

Who should consider opening a robo-advisor?

Sandra Cho:

“Someone who is a DIY investor and is tech-savvy enough to use the software involved. Larger groups of people need to be processed faster, such as participants in a 401(k) or other retirement plan.

“Investors who have smaller amounts of assets might not have the need for sophisticated financial planning.”

Tessa Campbell:

“Robo-advisors are best for beginners and passive investors who don’t want to be glued to their computers, watching the ups and downs of the market and trying to decide when is the best time to buy and sell.

“It’s also the better option for cost-conscious investors. With a robo-advisor, you can easily and affordably get exposure to different sectors of the market with low-cost ETFs. This way, you’re paying the price of individual stocks.”

Is there any advice you’d offer someone who’s considering opening a robo-advisor?

Sandra Cho:

“1) Treat it like a starting point, not the endpoint.

2) Find a good one. Not all robo-advisors are the same. Like financial advisors, there are good and bad ones.

3) Be aware of the investments you have, and do not have, through the robo-advisor you use. For example, if you are using a robo-advisor at a particular investment company, that robo-advisor will likely limit their recommendation to the mutual funds or other investments of only that company.”

Tessa Campbell:

“Make sure to compare all the robo-advisor options before opening an account. Not all robo-advisor provide the same investment options, account types, or features. And while many robo-advisors have low-trading fees and account minimums, not all of them do, so make sure you know what you’re getting into before opening a brokerage account with an automated investment platform.

“On a different note, make sure that you still frequently monitor your investment portfolio. Although you won’t do much on the day-to-day, it’s important to update your portfolio based on your current goals, financial situation, and market performance.”

Our Methodology

Business Insider’s methodology for rating investment platforms was used to analyze and compare dozens of robo-advisor platforms. The best robo-advisor platforms feature some of the lowest fees, multiple portfolio types, human advisor access, and excellent customer service.

We also favored platforms that offered a range of other features and products, such as tax-loss harvesting and flexible account types. Investment platforms are rated between 1 and 5.

FAQs

What is the best robo-advisor for beginners? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options. Acorns is the best robo-advisor for beginners because of its ease of use, low-cost trades, and beginner-friendly tools and resources. Other beginner-friendly robo-advisors are SoFi Invest, Fidelity Go, and E*TRADE.

What is the best robo-advisor for budget investors? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options. Fidelity Go is the best robo-advisor for budget investors who prioritize low-cost trading and account management. Fidelity Go offers cost-effective portfolios of Fidelity Flex mutual funds. Other top robo-advisors for low-cost trading are SoFi, Betterment, and Acorns.

Can I set up a retirement account with a robo-advisor? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options. Yes. The use of robo-advisors for retirement planning is common. Many robo-advisors offer retirement accounts, such as traditional and Roth IRAs, with automated portfolio management and rebalancing features. Robo-advisors allocate retirement portfolios based on age and risk tolerance to help you build long-term wealth while mitigating risk.

Can I withdraw my money from a robo-advisor at any time? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options. Most robo-advisors will allow you to withdraw money at any time without penalty, but make sure to review the terms and conditions of the specific robo-advisors you’re using to ensure there are no special fees or restrictions on withdrawals. Moreover, certain account types, such as for retirement, have age restrictions designed to prevent you from withdrawing early, but that is based on IRS rules, not the robo-advisor’s rules.

Are robo-advisors safe to use for investing? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options. Robo-advisors are secure investment platforms equipped with advanced security measures to protect users’ personal and financial information. Security features include data encryption software, account activity monitoring, and two-factor authentication. Robo-advisors also must follow SEC or relevant state regulations.

A financial advisor helps people manage their money and reach their financial goals.

The number of different services and areas of expertise offered makes finding the right one for your situation critical. Doing so means you won’t end up paying for services you don’t need or working with an advisor who isn’t a good fit for your goals.

Here are six steps to help you choose a financial advisor.

Step 1: Identify your financial needs

Before you start looking for the right advisor, reflect on what you’re hoping to get out of the relationship.

Some advisors may provide holistic help, guiding you on everything from savings goals and budgeting to retirement and estate planning. Other advisors might be specialists, meaning they have certifications or expertise in a particular area of finance.

Identifying what you need (and don’t need) could help you not only save money but also decide whether an online or traditional financial advisor is a better fit.

Here are some areas to dig into as you compile your financial advisor wishlist:

Personal finance: Financial advisors can help clients create budgets or financial plans. They can also help prioritize short- and long-term financial goals. For example, if you need help with specific savings goals — such as planning for home ownership, college or a large purchase — a financial advisor can offer suggestions for how to structure your money or investments to help meet those needs.

Debt: Some financial advisors specialize in debt management and repayment. This could be helpful if you are struggling with credit card, medical, student loan or other types of debt and are unsure of how to tackle it.

Investing: If you’re new to investing or just want a more personalized approach, a financial advisor can be helpful. Investment advisors can work with you online or in person, or you could even opt for a digital version, such as a robo-advisor.

Tax strategy and planning: Whether you’re running a business or just need some help with a tricky tax problem, financial advisors who specialize in taxation and tax planning can help. Some financial advisors have deep expertise in tax strategy or may even hold a certified public accountant (CPA) credential.

Retirement: Retirement planning can go beyond contributing to a tax-advantaged plan, such as 401(k) or IRA. If you’re interested in learning more about other ways to save — or even just make sure you’re on track — a financial advisor can help review your strategy and offer personalized recommendations that could help ramp up or diversify your savings.

Estate planning: If you’re looking to ensure that your assets get dispersed a certain way or that your loved ones have everything they need after you’re gone, an estate plan or a trust can help. A financial advisor who specializes in estate planning can make sure all the documents you need are in order.

All of the above: Sometimes you just want help with everything — and that’s OK. Plenty of financial advisors offer full-service financial support. If the idea of having one dedicated person or firm for all your financial questions and concerns is appealing, a holistic planner might be a good fit.

Step 2: Know what credentials to look for in a financial advisor

Financial advisors go by many names: investment advisors, brokers, financial planners, financial coaches and portfolio managers. There are even financial therapists. Some of the most common titles advisors use, including the term “financial advisor” itself, aren’t tied to any specific credentials, so don’t assume that someone who uses an official-sounding title has any specific training or credentials.

So who does what, and who can you trust? If you’re looking to work with someone who might be managing your money or giving you financial advice, first check to see if they are bound by a fiduciary duty; this means they are obligated to act in their client’s best interest rather than their own. Not all people who call themselves financial advisors are fiduciaries.

Here are two credentials you can look out for.

Certified financial planner (CFP)

Financial advisors who hold a certified financial planner designation have a fiduciary duty to their clients as part of their certification. Working with a CFP who has a fee-only payment structure is another way to ensure that the advisor is paid directly by you and not through commissions for selling certain investments or insurance products.

Registered investment advisors (RIA)

Registered investment advisors are either individuals or companies that employ investment advisors. They provide numerous financial services, including personalized investment advice, and are bound by fiduciary duty. RIAs are also registered with and regulated by either the U.S. Securities and Exchange Commission or state regulators, depending on how much money they manage [0] View all sources U.S. Securities and Exchange Commission . Investment Adviser Registration . Accessed Jun 20, 2024.

» Who does what? Learn more about the different types of financial advisors

Step 3: Review financial advisor service types

Financial advisors aren’t just available at your neighborhood advisory office or bank. There are lots of ways to get financial advice. The option that’s right for you will likely depend on your personal preferences, the services you need and your budget.

Robo-advisors

If your main goal is investing, you can consider working with a robo-advisor, a digital service offering simplified, low-cost investment management. You answer questions online, then computer algorithms build an investment portfolio according to your goals and risk tolerance.

Low cost ($): Some robo-advisors have no or low management fees, and many services have no or low account minimums, so you can start investing with any amount of money.

Good when: You need help investing for financial goals like retirement, but don’t want or can’t afford a complete financial plan.

Look elsewhere if: You need more rigorous financial planning. Although some robo-advisors offer higher-tier financial planning services, most excel at simple investment management.

Ready to compare? Read our full roundup of the best robo-advisors Show These top robo-advisors charge low fees but still offer high-quality features, including automated portfolio rebalancing, exposure to a range of asset classes and financial planning tools. Many also offer access to financial advisors.

Online financial planning services and advisors

This is the next step up from a robo-advisor: an online financial planning service that offers virtual access to human financial advisors. A basic online service might offer the same automated investment management you’d get from a robo-advisor, plus the ability to consult with a team of financial advisors when you have questions.

More comprehensive services such as Facet Wealth and Empower roughly mirror traditional financial planners: You’ll be matched with a dedicated human financial advisor who will manage your investments and work with you to create a holistic financial plan. Many online financial advisors can match you with an advisor with a top-tier credential, such as a certified financial planner.

Medium cost ($$): Online financial planning services will typically cost less than a traditional financial advisor but more than a robo-advisor. Some services have relatively high investment requirements of $25,000 or more; others require no minimum investment.

Good when: You’re comfortable meeting with an advisor online but would still like holistic financial planning services such as estate planning, retirement planning or help with company stock options. Online advisor marketplaces such as Harness Wealth and Zoe Financial, and many online advisors themselves, do the work of vetting a financial advisor for you. (NerdWallet also operates NerdWallet Advisory, a registered investment advisor offering advisor matches.)

Look elsewhere if: You’d prefer to work with an advisor in person.

Ready to compare? Read our full roundup of the best financial advisors Show Some of these financial advisors can match you with a local advisor, while others operate online and meet with clients virtually, via phone or video call.

Traditional financial advisors

Traditional financial advisors can meet with you in person and will be able to help you with all of your financial planning needs.

High cost ($$$): This is often the highest-cost option. Many traditional advisors charge about 1% of your assets under management. Some advisors also require a high minimum balance, such as $250,000 in assets.

Good when: You want specialized services, your situation is complex, or you want to meet your financial advisor in person and develop a long-term relationship with them.

Look elsewhere if: You want similar services for less, are comfortable getting help online or don’t want to vet a potential advisor yourself.

Want to work with someone local? How to find a financial advisor near you Show If you’d prefer to work with an advisor in your community, and you’re prepared to do the legwork yourself, here’s how to approach the process.

Step 4: Consider how much you can afford to pay an advisor

Financial advisors have a reputation for being costly, but there is an option for every budget. It’s important to understand how much a financial advisor costs before you commit to services. Generally speaking, there are three cost levels you’re likely to encounter:

Robo-advisors often charge an annual fee that is a percentage of your account balance with the service. Robo-advisor fees frequently start at 0.25% of the assets they manage for you, with many top providers charging 0.50% or less. On a $50,000 account balance, 0.25% works out to $125 a year.

Online financial planning services and advisors typically charge either a flat subscription fee, a percentage of your assets or both. For example, Empower charges 0.49% to 0.89% of assets under management per year. Facet charges an annual fee that starts at $1,000 a year and goes up based on the complexity of your financial situation. Both fees include portfolio management and financial planning.

Traditional financial advisors also often charge a percentage of the amount managed, with an average fee of 1.05%, although it can range higher for small accounts and lower for large ones. Others may charge a flat fee, an hourly rate or a retainer.

How much you should spend on a financial advisor depends on your budget, assets and the level of financial guidance you need. If you have a small portfolio, an in-person advisor might be overkill — you will save money and get the guidance you need from a robo-advisor. If you have a complicated financial situation, a robo-advisor may not provide what you need.

Step 5: Vet the financial advisor’s background

No matter what title, designation, certification or license an advisor claims to have, it’s on you to vet the advisor’s credentials and experience. Always verify any credentials they claim to have and check to see if they’ve had any disciplinary problems such as fraud.

You can research an advisor’s background by looking up their Form ADV before you agree to work with them. You can also review an advisor’s employment record (and look for red flags like disciplinary actions) on FINRA’s BrokerCheck website.

Next SteP 10 questions you should ask a financial advisor Show See our list of questions you’ll want to ask before you sign on the dotted line, including whether the advisor follows a fiduciary standard, what their fee structure is, and how frequently you’ll communicate.

Step 6: Hire the financial advisor

If you’re happy with a particular financial advisor’s background and are confident that they’re a good match for your financial situation, the next step is to start working with them.

The hiring process for financial advisors will vary from advisor to advisor, but here is a general outline of the steps in engaging a financial planner or similar professional:

A consultation with the advisor to discuss your financial situation. This is typically free. The advisor provides you with an engagement letter outlining their ethical principles and any potential conflicts of interest. The advisor provides you with legal documents to sign, such as a Form ADV and/or a Form CRS. The advisor begins gathering information on your financial situation and starts managing your finances.

The exchange-traded fund (ETF) industry is on the verge of a major shift, which some experts are calling a “floodgate” moment.

The Securities and Exchange Commission (SEC) is currently reviewing applications from several fund managers seeking approval to offer ETF share classes of their existing mutual funds. While Vanguard has long used this structure under a now-expired patent, no other firms have been permitted to adopt it yet.

If the SEC gives the green light, it would mean that more mutual fund families – not just Vanguard – could access the same in-kind creation and redemption mechanics that make ETFs more tax efficient. This process allows ETF managers to meet investor flows without triggering taxable capital gains distributions, something traditional mutual funds have historically struggled with.

Still, some firms like Fidelity Investments remain focused on their core lineup of mutual funds, many of which have been around for decades and manage billions in assets.

Investors continue to find value in both sides of Fidelity’s offering: active funds with long-term outperformance from seasoned managers, and passive index funds that are low-cost, commission-free and easy to automate with recurring contributions.

Here are seven of the best Fidelity mutual funds to buy and hold:

Fund Expense ratio Fidelity Total Market Index Fund (ticker: FSKAX) 0.015% Fidelity 500 Index Fund (FXAIX) 0.015% Fidelity Zero Total Market Index Fund (FZROX) 0% Fidelity Zero International Index Fund (FZILX) 0% Fidelity Magellan Fund (FMAGX) 0.56% Fidelity Blue Chip Growth Fund (FBGRX) 0.47% Fidelity Contrafund (FCNTX) 0.63%

Fidelity Total Market Index Fund (FSKAX)

“Savvy investors understand the importance of keeping your costs low and your options open, and Fidelity funds have become popular because they offer just that,” says Andrew Mark Latham, a certified financial planner and director of content at SuperMoney.com. “With no sales loads, low fees and no minimum investment requirements, it’s easier to start investing without breaking the bank.”

Broad-market index funds like FSKAX allow investors to own the entire U.S. stock market with a single investment. This fund tracks the Dow Jones U.S. Total Stock Market Index, which currently spans more than 3,800 small-, mid- and large-cap domestic stocks across all 11 sectors. Fidelity has offered this fund since 1997 and over the years the expense ratio has dropped steadily to what is now just 0.015%.

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Fidelity 500 Index Fund (FXAIX)

“While it truly depends on each individual investor’s specific goals and objectives, I typically advocate for index funds in the accumulation phase, as these give great broad-market exposure with lower fees than actively managed funds,” says Wes Moss, managing partner and chief investment strategist at Capital Investment Advisors. A popular alternative to FSKAX is FXAIX, which tracks the S&P 500.

This Fidelity fund also indexes U.S. equities, but with a focus on just 500 large- and mid-cap companies selected based on size, liquidity and earnings consistency, subject to a committee review. However, because FXAIX is still market-capitalization weighted, the top holdings for this fund are virtually identical to FSKAX. FXAIX has been trading continuously since 1988 and currently charges a 0.015% expense ratio.

Fidelity Zero Total Market Index Fund (FZROX)

“Fidelity introduced zero-expense-ratio index mutual funds and also offered zero-minimum-investment mutual funds, no minimums to open an account and no account fees for retail brokerage accounts,” Moss says. These special zero-expense-ratio mutual funds come from Fidelity’s “Zero” lineup, which uses a combination of three strategies to completely eliminate fund fees for investors.

For example, FZROX starts by tracking the Fidelity U.S. Total Investable Market Index, which cuts down on index licensing fees typically associated with external benchmarks like the S&P 500. Instead of buying and holding every single stock in the index, FZROX employs a sampling technique to cut down on transaction costs. Finally, FZROX can lend securities to generate income, which further offsets expenses.

Fidelity Zero International Index Fund (FZILX)

“International investing can be a great diversifier for investors who are too heavily concentrated in U.S. stocks,” says Henry Yoshida, senior vice president of Retired.com. “With FZILX, you can invest internationally at zero cost – this is a win-win for any serious long-term investor.” This can help investors avoid the back-end fees of American depositary receipts (ADRs) or currency conversion costs.

As with FZROX, FZILX employs the same strategy of proprietary index, sampling and securities lending to reduce fees to zero. However, it tracks an entirely different segment of the stock market via the Fidelity Global ex U.S. Index. This currently comprises more than 2,200 stocks from both developed and emerging-market countries weighted by market capitalization.

Fidelity Magellan Fund (FMAGX)

Investors aiming to beat the market can consider an active fund like FMAGX, as long as they’re comfortable with higher fees and the potential for underperformance. FMAGX has a legendary history, once led by famed manager Peter Lynch, whose “buy what you know” and “growth at a reasonable price” approach helped the fund deliver outsized returns during his tenure.

After Lynch retired the fund struggled, with some managers accused of “closet indexing” – holding portfolios too similar to the benchmark. But since taking over in February 2019, current manager Sammy Simnegar has delivered strong results. His large-cap growth focus has returned 17.8% annualized over the past three years, outperforming both the S&P 500 and the Morningstar large growth category.

Fidelity Blue Chip Growth Fund (FBGRX)

FMAGX isn’t the only standout active fund in Fidelity’s lineup. A strong alternative is FBGRX, which targets stocks that Fidelity defines as “well-known, well-established and well-capitalized.” Launched in 1987, FBGRX now carries a lower 0.47% expense ratio and has outperformed the Russell 1000 Growth Index on an annualized basis over the trailing 10-, five- and three-year periods.

Much of that success is credited to portfolio manager Sonu Kalra, who has led the fund since 2009. Kalra focuses on companies with above-average earnings growth and sustainable business models, favoring those with durable competitive advantages, pricing power and experienced management teams. The current composition of FBGRX’s technology-heavy portfolio reflects his views on growth investing.

Fidelity Contrafund (FCNTX)

FCNTX is one of Fidelity’s most successful active mutual funds, having outpaced both the S&P 500 and the Morningstar large growth peer group by a wide margin over the trailing 10-, five- and three-year periods, even after accounting for a 0.63% expense ratio. The fund is still led by William Danoff, who has managed it since 1990 with a style that favors strong management teams and free cash flow.