Can Robo-Advisors Save You in a Volatile Market?

Robo-advisors to Help You in a Volatile Market

Although it has had a major impact, algorithmic trading is only one of the reasons why markets have increased in volatility. However, could you better weather the storm if you had access to the same technology as individual investors? Many say yes and are turning to robo-advisors in a volatile market to manage their assets.

What is a Robo-Advisor?

In simplest terms, the robo-advisors combine computerized trading with advice. They are becoming more popular since they are often free or available for a fraction of what you would pay for a financial advisor. Not only are they allowing greater access to individual traders, but also changing the way people manage and invest their money.

Algorithmic Trading

Computerized trading follows a model drafted by a financial advisor or economist. However, most models consist of exchange-traded funds (ETFs) reflecting the investor’s risk appetite, objectives, and time horizon.

Once you complete the questionnaires to determine these factors, computerized trading relies on algorithms to execute transactions. Thanks to current technology, we can now calculate these variables at a level of sophistication and speed that was previously only available to professional investors. Then, the automation periodically maintains the original strategy of the portfolios by rebalancing, performing dollar-cost averaging, or harvesting capital losses or gains on taxable accounts.

Using automated services enables lower fees than what human financial advisors charge. However, the overall method to determine fees is often similar. They typically charge a (fraction of a) percentage of the total portfolio value annually. Reducing your annual fees is one way robo-advisors work to your advantage in a volatile market. Unfortunately, there will always be some level of risk to contend with.

Robo-Advisors Performance in a Volatile Market

Some of the companies in this space demonstrate strong performances. Or, at least they did until the markets increased in volatility.

You should look at robos as a way to handle market turbulence. Rather, they offer a way to keep fees from interfering with your overall account appreciation. Furthermore, they regularly attend to your accounts that you may forget to do. Using robo-advisors automated services allows greater flexibility and adaptability in a volatile market.

Although this category of financial service continues to attract more assets and hype, it has limitations worth keeping in mind.

Which Company Has the Best Robo-Advisor in a Volatile Market?

Here’s a look at the different companies in this space, along with their fees and strategies.


If you struggle to discipline yourself to save or invest, this robo is for you. It effectively helps you invest and save. It simply collects your spare change from electronic transactions. You only need to enable Acorns to round up the charge to the next-highest whole dollar amount on every purchase you make. Then, it automatically invests it for you.

Best of all, you can adjust it to your goals. You set the maximum amount per month. And, you can get money added to your account as a reward for deals with participating merchants. Using robo-advisors to help you save bolsters against losses in a volatile market.

Fees: For assets below $1 million, you pay $1 to $3 per month for one of three tiers of services.

Strategies: Acorns suggests strategies based on your income, time horizon, goals, and risk appetite.

Sign-up to Acorns here.

Ally Invest Managed Portfolios

This online bank’s offering in the robo-advisory space has gotten less attention. Not only does it have low fees, but is also easy to use.

Fees: You pay 0.3% of the portfolio balance annually and maintain a minimum account of $2,500.

Strategies: Their suggested portfolios reflect nine different levels of risk tolerance, three different types of goals, and five different general time horizons.


In one important sense, this company has more transparency with its robo strategies than the others listed here. In fact, it is the only one that publishes historical performance data on three-, five- and 20-year horizons for the portfolios.

Fees: The company’s fees are based on the number of assets you add to an account. However, the minimum amount is $50,000. When you enter that as the starting amount, you pay the maximum fee of 0.45% annually. But, that eventually scales down to 0.2% annually if you reach $20 million or more. Additionally, the company also sells retirement-related services for 0.5% annually. Furthermore, the site charges commissions on individual trades of $11.95 per transaction.

Strategies: The site has eight strategies on a spectrum of risk tolerance. The two most conservative strategies are referred to as capital preservation. Then comes a balanced strategy. After that, there are two strategies for growth. Finally, the company also has two different aggressive growth strategies.


Although better known for its robo-advisory offerings, this company can also match you up with a human financial advisor. However, the fees and strategies below only apply to the robo-advisor.

Fees: The company charges 0.25% annually for the digital service and 0.40% for a premium level.

Strategies: Betterment works with five general categories of investing goals: saving for retirement, retirees withdrawing income, emergency funds, general investing, and preparing for a major purchase. Although, you’re allowed to choose more than one. The suggested portfolio is further customized based on your stated time horizon and your risk tolerance.

Sign-up to Betterment here.


This option focuses on retirement plans. It assesses strategies that might not get any third-party attention otherwise.

Fees: There’s a flat rate of $10 per month.

Strategies: The company takes over the management and monitoring of your retirement plans provided by employers. So, any 401(k), 401(a), 403(b), or 457 plans are included. It optimizes your fund selection in a way that maximizes performance and minimizes hidden fees.


This company markets a full range of financial services to women. As part of that, it offers a robo-advisor product.

Fees: For accounts under $1 million, the annual fees are 0.25% of the balance of the portfolio. However, for premium accounts, it’s 0.5% of the balance.

Strategies: Ellevest creates portfolios based on the investor’s risk tolerance, time horizon, and goals. The latter can include saving up an emergency fund, down payment on a home, new business, children, retirement, and building wealth. But, you can also choose more than one of the aforementioned goals.

E*Trade Dedicated Portfolios

This leader in the world of online brokerage offers more than just the individual trading that the rest of the business is based on. They also have a line of robo-advisory services as well.

Fees: Depending on the amount of money you invest, the strategy you choose, and the amount of attention from a human financial advisor that you want, annual fees can range from 0.3% to 1.25%.

Strategies: A dedicated financial consultant helps you build a fully customized portfolio. It is then monitored and actively managed for you. There are three general groupings of services. The first tier is known as core portfolios and has a minimum balance requirement of $5,000. The next level up is blend portfolios, which have a minimum balance requirement of $25,000. The top tier is fixed income portfolios with a $250,000 minimum balance requirement.

Fidelity Go

This mutual fund giant has teamed up with Strategic Advisers, National Financial Services, and Geode Capital Management to offer a robo-advisory service.

Fees: They range from 0.35% to 0.4% annually.

Strategies: This service suggests strategies based on your goals, time horizon, and your risk appetite (on a scale of one to 10).

Financial Engines

This company sells robo-advisory services to other companies. Usually, it serves as a front-end provider for employer-sponsored retirement plans.

Fees: They have ranged from 0.2% to 0.6% annually.

Strategies: The company offers a robo-advisor type of interface for retirement plans.


This robo focuses on a fixed income. It clarifies that its offerings are intended for inclusion in an overall portfolio strategy.

Fees: The company recommends a bond strategy without charging you anything. However, then it directs you to Interactive Brokers to transact. Unfortunately, they do charge fees for their services.

Strategies: Everything suggested by IncomeClub involves fixed income in one form or another. Depending on your time horizon, risk appetite, and objectives, this site suggests different assets. It may recommend money market funds, certificates of deposit, federal government bonds, municipal bonds, corporate bonds, international bonds, or combinations thereof.


Open an account with this particular robo-advisor, and you too can have the same killer investment performance that the Yale University endowment is famous for. In fact, the brains behind said wonder-fund, Dave Powell, created FutureAdvisor’s portfolio models.

Fees: The annual management fee is 0.5% of the value of your portfolio. Over 90% of the funds used by FutureAdvisor trade commission-free. However, there are commissions of $7.95 per trade for the others. Add in the expense ratio of the funds, and you have a total fee of about 0.65% a year.

Strategies: Designate whether your risk appetite is conservative, moderate, or aggressive. Then, convey your time horizon for FutureAdvisor to suggest a strategy.


This web-based investing platform promises that its rebalancing algorithms can add up to 2% to the value of your portfolios.

Fees: You pay $14.95 a month or $195 annually.

Strategies: The company has three types of strategies. One of them is intended to help you save for emergencies, another for retirement, and the third for more speculative goals.

M1 Finance

Purists say that M1 Finance’s business model only partly resembles a robo-advisor at the portfolio management stage. However, it is still among one of the top robo-advisors to help you manage your assets in a volatile market.

Fees: The company states that it charges no fees to consumers.

Strategies: Instead of suggesting a portfolio, M1 Finance offers a visual interface for people to set up portfolios. Then, it maintains the portfolio allocation using algorithmic trading.

Merrill Edge Guided Investing

This old-school retail brokerage has expanded into robo-advisory services.

Fees: You pay 0.45% annually. Plus, trades can have commissions of one to three cents per $1,000 traded. 

Strategies: The company recommends different strategies based on your investment horizon, goals, and risk tolerance. They base recommendations on answers to a questionnaire.

Morgan Stanley Access Investing

This full-service investment house has thrown its hat into the ring with a robo service.

Fees: You pay just 0.35% of the value of your portfolio annually.

Strategies: Morgan Stanley has portfolios modeled for specific goals like retirement, education, building wealth, starting a business, saving for a wedding, buying a car or house, or other large purchases. You also specify target dates, your risk appetite, and whether there are any specific areas of investing that you’re interested in.

Personal Capital

This company offers free software to help you analyze your finances. It suggests ways to minimize your fees. But, it leads you toward its robo-advisory offerings.

Fees: If your account value is below six digits, you pay an annual fee of about 0.89% of your portfolio value. Commit more than that, and you lower the fee.

Strategies: There are three tiers of services based on the number of assets you choose to commit. If you have $200,000 or less, you’re in the tier that most closely resembles the robo model. At this level, a financial advisor recommends a portfolio of tax-efficient ETFs. From there, you’re entirely automated.

The next level up gets you more customization and advice. Those with more than $1 million to invest get the private wealth management treatment. This includes full access to a financial advisor.

Schwab Intelligent Portfolios

For a discount brokerage with a history of no-frills, low-commission trading, Schwab’s robo-advisory service is surprisingly sophisticated.

Fees: Interestingly, Schwab doesn’t charge advisory fees for its robo service. The company says there aren’t any hidden fees or commissions. It clearly states that it earns revenue from the underlying assets in the portfolios.

Strategies: Each portfolio contains up to 20 different asset classes. They are determined in proportions that are based on an investor’s risk appetite, current life circumstances, and goals.


This company offers robo-advisory services directly to consumers and in partnership with other financial institutions such as Wells Fargo Bank.

Fees: You pay nothing for your first $10,000.  However, the minimum balance is $2,000. After that, they charge 0.25% annually for every dollar above that amount.

Strategies: There are portfolios with conservative, moderate, and aggressive growth strategies. They are tailored for different types of goals and time horizons.


Stash is ideal for people who are new to investing. This mobile app suggests not just ETFs but also looks at other types of investments based on your preferences.

Fees: For accounts under $5,000, the first month is free. After that, you pay $1 per month. But, this fee increases to $2 per month for a retirement account. Above the minimum amount, the fees switch to 0.25% of your annual portfolio balance.

Strategies: Stash suggests individual investments based on your investment budget, risk tolerances, goal, and time horizon.

TD Ameritrade Essential Portfolios

This discount brokerage has come out with a robo-advisory that leverages the company’s low-to-no commissions on core ETFs.

Fees: The lowest-tier service, Essential Portfolios, costs 0.3% annually. The next level up, Selective Portfolios, costs 0.75%. The top tier, Personalized Portfolios, has service costs up to 0.9%.

Strategies: Essential Portfolios has five different portfolios. Selective Portfolios consist of a broader range of goal-oriented portfolios. Personalized Portfolios offer more tailored portfolio construction and advice.

Vanguard Personal Advisor Services

This mutual fund giant issues some of the most cost-efficient ETFs in the industry. Therefore, Vanguard is certainly well-positioned to compete in the robo-advisory market.

Fees: You pay just 0.3% of the portfolio value annually.

Strategies: Vanguard arranges a meeting with a human investment advisor to set up a strategy reflecting your goals and current financial situation. Then, the robo-advisor executes and manages the portfolio. Their services allow you to be as involved as you want, giving you one of the best robo-advisors to navigate in a volatile market.


This robo aims to reduce taxes, fees, and risk all in one offering.

Fees: You pay 0.25% of your portfolio value per year.

Strategies: The company has three categories of portfolio allocations. One is for retirement and the rest for taxable accounts. Within each of these categories, there are 20 different portfolios. Each of them has different amounts of risk and volatility.


The company’s approach aims to minimize volatility and maximize reward through diversification.

Fees: You pay 0.4% annually with a balance of five digits. If you have less than that, you pay 0.5%.

Strategies: The company currently offers you a choice of three strategies: conservative, balanced, and growth.

Wells Fargo Intuitive Investor

The money-center bank unveiled a robo-advisor in partnership with SigFig.

Fees: If you invest $10,000 to $25,000, you pay an annual fee of 0.5%. That fee drops to 0.4% if you have a minimum of $25,000 in a Wells Fargo deposit account, or $50,000 in combined banking, brokerage, and credit accounts.

Strategies: The service has nine different portfolios based on your goals, time horizon, and risk appetite. The choices include conservative income, moderate-income, aggressive income, conservative growth and income, moderate growth and income, aggressive growth and income, conservative growth, moderate growth, and aggressive growth.

How Can You Choose the Right Robo-Advisor to Withstand a Volatile Market?

As you can see, many robo-advisors can help you manage your assets in a volatile market. However, with so many choices, you could suffer decision fatigue from comparing them.

So, one way to streamline the process is to choose the one with the lowest fees. In that case, the free robo-advisors are the most attractive. But, before you rush into anything, make sure you read and understand their business model. It may not provide the services you need.

Reputable online brokers are technically free of charge as well. And, they bring an added level of trust to personal financial management. They can offer services for free they will earn income from third parties using a business model called payment for order flow.

However, you may feel more comfortable working with robo-advisors offered through an institution that you know. If you already have a relationship with them, using their robo-advisors makes money management simpler in a volatile market.

There are plenty of tantalizing choices in the robo-advisory world. Most of them offer great opportunities to maximize your investment performance by saving money on fees. However, you should choose the one that best aligns with your financial goals.

When to Work with a Human Financial Advisor

If you need more personalized advice, then you won’t get it from any of the robos. But, you could get the best of both worlds by also working with a human financial advisor.

A human financial advisor can give advice based on an investor’s current life situation and preferences. Unfortunately, the robo questionnaires usually don’t ask about investors’ beliefs or ideals. Nor can they sense whether someone is confused about their goals or risk appetites.

Robos can’t handle certain kinds of complex financial planning. So, if you’re setting up estates, looking for insurance recommendations, or need coaching on budgets, it is more beneficial to work with a human financial advisor.

Best of Both Worlds

If you require more in-depth attention, then you should hedge your proverbial bets. You don’t have to choose one over the other. Instead, you can utilize a combination of both. Then, you can tap a human financial advisor for some situations and a robo for others. Although robos use the same technology as algorithmic traders, none can explain current market conditions to you the way a human financial advisor can.

Readers, are there any companies that weren’t included in this article that you think should be added? Have you looked into any robo-advisors? If so, which ones? Or, if you haven’t checked any of this out yet, why not? Have you ever worked with a financial advisor? What kind of investing experience do you have?

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