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Robo-advisors vs. financial advisors: What’s better for you?

Robo-advisors and human financial advisors can both help you meet your investing goals but what's best for you? We show you the differences to help you decide.

Robo-advisors vs financial advisors highlights two areas of investing: automated, more passive strategy vs a higher-fee human advisor. They can both help you meet your investing goals and manage your finances, but which one is better? Is there a ‘correct’ best choice?

With such different features and guidance between the two, the answer really depends on where you are in your investing journey. Robo-advisors are best for beginners and hands-off investors while financial advisors are best for more experienced investors who have a lot of questions, but you’ll need more to decide.

Red on to find out more about investing with robo-advisors vs financial advisors, how they’re different, the costs, and how to decide.

What is a robo-advisor?

A robo-advisor isn’t exactly an “advisor.” It’s actually an investment platform automatically managed by a computer algorithm. A comparison of some of the best robo-advisors can provide a sense of the services they offer.

You outline what you want to achieve (usually through a series of questions) and how much risk you are willing to take on, and the computer does everything else. It sets up your investments and rebalances your portfolio as the stock market shifts so that you stay on target with your goals.

Robo-advisors are ideal for investors who want to set and forget their investing for a reasonable fee for the convenience.

Here are some of the best features offered by a robo-advisor:

Easy to start investing

It usually takes just a few minutes to easily start investing with a robo-advisor by answering some questions about your finances, goals and risk tolerance. Usually, you do everything 100% online without talking to a human.

Less expensive

Robo-advisors often have lower fees than traditional financial advisors, either by set flat rates or a percentage of invested balance. Many robo-advisors charge less because they have less overhead and don’t have to hire people for hands-on advising and management.

They also invest in exchange-traded funds (ETFs) that are often cheaper to trade than individual stocks or other investments.

Low balance minimums

Many robo-advisors don’t require any minimum balance and others have very low requirements to get started. Knowing how much money you have to invest can help you narrow down your choices.

When to use a robo-advisor

Choosing a robo-advisor helps you start investing no matter how much money you have to begin with. Go for a robo-advisor if:

You’re starting small

Financial advisors often require a certain amount of assets under management in order to make managing your portfolio worth their time (typically 100k+). Many robo-advisors, on the other hand, let you deposit what you can, whether that’s $100 to invest or $1,000 to invest, and grow your balance little by little.

You want to invest on auto-pilot

Whether you’re new to investing or just looking for an easier method, many people prefer putting their investing on auto-pilot.

With a robo-advisor, you can practically put your investments out of mind knowing that the platform is automatically rebalancing your portfolio to keep your asset allocations on track. There are even features, like spare-change investing and options to have part of your paycheck invested, so the whole process from end-to-end isn’t a frequent concern and your money’s put to work.

Best robo-advisors we recommend

Robo-advisors have become increasingly popular over the last several years. Here are our top recommended picks to explore based on your own unique needs.


You can begin investing with Wealthfront with an opening deposit of $500. You’ll start by answering some easy questions to help the platform understand your risk tolerance, then it’ll build your portfolio for you and manage it after for a reasonable annual fee.

Most recommended robo-advisor

Wealthfront is designed for young professionals, anyone from passive investors who want expert digital guidance, to people who want to be smarter with money.

With low fees and multiple tax perks, automated investment management tuned in to your individual risk level make Wealthfront worth a look.

Special offer: Open your first investing account and get a $50 deposit bonus. Promotional terms apply.
  • Passive investing with automated management
  • Tax-loss harvesting
  • Ability to customize portfolios
  • No fractional shares of ETFs in automated accounts
  • No human advisors
Get $50 bonus
MoneyUnder30 receives cash compensation from Wealthfront Advisers LLC (“Wealthfront Advisers”) for each new client that applies for a Wealthfront Automated Investing Account through our links. This creates an incentive that results in a material conflict of interest. MoneyUnder30 is not a Wealthfront Advisers client, and this is a paid endorsement. More information is available via our links to Wealthfront Advisers.

Wealthfront focuses on diversifying your portfolio with low-cost funds and ETFs and minimizing your tax obligation with various tax reduction strategies including daily tax-loss harvesting. With an abundance of features, Wealthfront is perfect for those who just want to be passive investors and work towards the goals they set.

Wealthfront charges a 0.25% annual advisory fee on your balance, no matter how much you have invested. It’s notable, but quite a bit less than you could expect to pay with a financial advisor.

» MORE: Sign up for Wealthfront or read our full Wealthfront review


Acorns is a multifunction financial app that offers all the standard robo-advisor features, including recurring investments (as little as $5 at a time), automatic portfolio rebalancing, and dividend reinvestment by default.

Great for new investors

Acorns makes it easy to start investing (even if you know nothing) and provides helpful tools to help you save more automatically. In under 3 minutes, start investing spare change, saving for retirement, earning more, spending smarter, and more.

Special offer: Claim a bonus today in three easy steps: open account, set up recurring investments, make your first successful recurring investment (min. $5). Receive a $20 bonus investment.
  • Effortless automated investing
  • Easy-to-use savings features
  • Low-cost solution to manage money
  • Flat monthly fee more expensive for smaller accounts
  • Can use more robo-advisor features
Get $20 bonus

New investors who need help sticking to investing/saving would enjoy how easy it is to get started with Acorns and how effortless it is on the back of a well-designed mobile app.

The fees are fair and pretty transparent, ranging by tiers from $3 to $9/month. Given that most robo-advisors charge an annual fee, you may welcome knowing what your set fee will be and actually benefit from an incredible deal as your balance grows.

» MORE: Open an account with Acorns today or read our detailed Acorns review

What is a financial advisor?

A financial advisor helps you decide what to do with your money, often more holistically than a robo-advisor would. They help you plan for retirement, build wealth, and reduce financial risks.Together, you and a financial advisor develop a plan to reach your financial goals in a timely manner through investments and other financial accounts.

Here are the best features of financial advisors:

Holistic financial advice

A financial advisor is equipped to review your entire financial situation and help you create a plan based on your reality today in order to help you achieve your goals for tomorrow.

This includes retirement planning, tuition planning, and both long- and short-term goals like saving for a house. An advisor can work with you to budget and plan.

Personalized service

Working with a financial advisor means you have somebody you can call, email, or text when you have a question about your portfolio. Your advisor gets to know you over the years and understands what’s important to you.

When to use a financial advisor

A financial advisor may be more expensive than a robo-advisor, but there are times when it makes sense to hire a financial advisor.

You prefer a single contact

Many robo-advisors either don’t offer the opportunity to speak with a human advisor or charge substantially extra for this service. A financial advisor typically doesn’t limit how many times you can reach out with questions each year.

Plus, you know you’ll always reach out to the same person that knows you rather than going through a customer service call center.

Your finances are complex

As you grow your wealth, you may more help than a robo-advisor can offer. A financial advisor can work with your accountant to help mitigate your taxes and even an estate attorney to help with your will and other estate planning strategies. Your advisor may also give you advice on insurance to protect your wealth.

Services to match you with a financial advisor

If you prefer a more personal, hands-on approach to your investments, consider one of these platforms for getting the professional help you need.


Paladin is an online directory of financial advisors, offering two easy and free services to help you find the best professional.


Paladin Registry is a free directory of financial planners and registered investment advisors (RIAs). The registry has the highest standards for its advisors, and it works with your requirements to find the perfect match.

  • Free to use
  • Narrowed and vetted pool
  • No obligation to move forward
  • Requires at least $100,000 in investable assets
Find a Financial Advisor

The first is a straightforward directory service. Simply enter your zip code and find a list of vetted experienced financial advisors in your area on your own.

The second option is a matching service. Just fill in a few details that are kept secure and you’ll receive recommendations based on your shared needs.

Both of Paladin Registry’s services are free so you have multiple professionals to interview and evaluate.

» MORE: Find a financial advisor with Paladin


SmartAsset is a personal finance platform that matches people with highly qualified financial advisors for free.


SmartAsset is a personal finance platform that matches people with highly qualified financial advisors for free. Only fiduciaries legally obligated to act in your best interest are in SmartAsset’s directory, so you know the provided advisors won’t just try to sell you something.

  • Match process is free
  • Free and interactive financial tools and information
  • No mobile app
Get Started

SmartAsset offers a tool that matches you with up to three financial advisors who serve your area based on your needs. You can interview your returned advisor matches at no cost to decide which one is right for you.

To get started, SmartAsset asks you several questions about your goals. Things like when you plan to retire, how much you save each month, what’s important to you in retirement, etc. You don’t have to go into the search knowing what kind of advisor you’re looking for. Once you’ve answered the questions, SmartAsset builds your profile and recommends firms that check your boxes.

» MORE: Find a financial advisor with SmartAsset


Take your time deciding if a robo-advisor or financial advisor is a better fit for you. If you’re new to investing, you’ll probably get the most out of the value from robo-advisors. If you’ve been investing for a while and know what you want, try finding a financial advisor.

It’s better to make an informed decision and just get started investing so you can take advantage of compound growth as soon as possible.

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