The Finance World Magazine| Edition: October 2023

Fintech
Discover the Top 3 Robo-Advisors for
Smart Investments
In today’s fast-paced and digitally driven world, investment opportunities have
become more accessible to the average person than ever before. One of the most
notable advancements in the area of investing is the rise of robo-advisors. These
automated investment platforms offer a convenient and cost-effective way for
individuals to grow their wealth through smart investment strategies. This article
explores the top 5 robo-advisors for smart investments.
Betterment (Best Robo-Advisor Overall)
Betterment stands as the top
choice for investors seeking
the best robo-advisor overall
due to its winning combination of
user-friendliness, personalized portfolio
construction, and tax-efficient
strategies.
Betterment, as a robo-advisor, excels
in tailoring portfolios to align
with your specific financial goals. To
get started, you choose from a list of
common financial objectives, which
encompass Major Purchases, Education,
Retirement, Retirement Income,
General Investing, and Safety Net.
Each goal can have its unique portfolio,
and you set the time horizon for
each one. Betterment’s robo-advisor
offers a recommended portfolio allocation
based on your chosen goal and
time horizon.
These recommendations become
more conservative as you approach
your goal, and they can also be adjusted
according to your risk tolerance,
ranging from very aggressive to very
conservative. Betterment’s forecasting
capabilities estimate your likelihood
of achieving long-term goals, factoring
in your current savings and projected
investment returns. You can even
link other investment accounts to
the platform for a comprehensive
outlook. Additionally, Betterment
offers goal-setting options for crypto
investing and saving through its
cash management accounts. These
goal-setting tools simplify the process
of effectively harnessing Betterment
for your financial aspirations.
Betterment creates portfolios using
stock and bond ETFs based on modern
portfolio theory. It offers a variety of
equity investments, including U.S.,
international, and emerging market
stocks, along with the unique inclusion
of international bonds. Investors can
choose from eight distinct strategies
to align with their preferences, from
the Core for long-term, cost-effective
investing to the Sustainable, which
prioritizes energy-efficient crypto assets.
Notably, REITs are absent from
Betterment’s robo-advisor portfolios
but can be accessed via the Flexible
portfolio, allowing customization of
allocations and assets. However, selecting
a Flexible portfolio disables
the auto risk adjustment as the target
goal date approaches.
A strong emphasis on tax efficiency
sets Betterment apart. It implements
advanced strategies like tax-loss harvesting
to enhance after-tax returns,
appealing to investors seeking to
minimize tax liabilities. Moreover,
Betterment offers highly competitive
pricing, with a modest advisory fee
of 0.25%, considerably lower than
traditional financial advisors.
Beyond investment management,
Betterment also provides access to
Sarah Kirshbaum Levy,
CEO
certified financial planners, comprehensive
financial planning tools, and
a wealth of educational resources.
Whether you’re a newcomer to investing
or a seasoned pro, Betterment’s
holistic and user-centric approach
accommodates a diverse range of
investors. This commitment to user-friendliness
and comprehensive support
solidifies Betterment’s position as
the best robo-advisor overall, setting it
apart in the competitive robo-advisory
landscape.
16 www.thefinanceworld.com October 2023