Are robo advisors safe in a market crash?

They can’t prevent losses, but they auto-rebalance and harvest tax losses, buying low and selling high by design. Your securities are still SIPC-protected up to $500k.

What total fee should I expect?

Combine the advisory fee (0.15 – 0.35 % AUM for pure robos) with underlying ETF expense ratios (0.03 – 0.10 %). All-in, many users pay ≤ 0.45 % annually.

Can I customize my portfolio’s holdings?

Most platforms let you exclude specific sectors (e.g., tobacco) or dial in ESG exposure. Full ticker-level selection is rare—consider a self-directed sleeve if you need it.

How does automated tax-loss harvesting work?

The algorithm scans positions daily, selling ETFs that dip below cost basis and replacing them with near-identical funds to maintain exposure while booking a tax-deductible loss.

Hybrid robo vs. traditional financial advisor—what’s the real difference?

Hybrid robos offer on-demand CFP consultations for a fraction of the 1 % AUM standard, but typically limit advice to investment planning. Estate, insurance, or complex tax strategies may still require a full-service advisor.

Robo | Money Atlas

Best Robo Advisors of June 2025

Algorithm-driven portfolios have hit their stride: in 2025, robo advisors manage $2 trillion+ in client assets, coupling low fees with institutional-grade tax tactics once reserved for the ultra-wealthy. The platforms below automate everything from asset allocation to daily tax-loss harvesting, letting you focus on funding your goals—not fiddling with trades.

How Robo Advisors Work

Most robo-advisors funnel deposits into diversified ETF portfolios based on your timeline and risk tolerance. Behind the scenes, they:

Model	Typical Traits	Best For
Pure Robo	0.15 – 0.35 % advisory fee, automatic rebalancing, daily tax-loss harvesting	Hands-off investors who want the lowest cost
Hybrid Robo-Plus-Planner	0.30 – 0.60 %, same automation plus on-demand CFP® video calls	Users who want occasional human guidance
Micro-Investing/Round-Up Apps	$0 account minimum, fractional ETF buys, gamified UI	Beginners starting with spare change

Every option sits in an SIPC-insured brokerage wrapper; idle cash is generally swept to FDIC-insured partner banks.

Pros & Cons

Pros

Rock-bottom advisory fees vs. traditional 1 % AUM models
Automatic rebalancing keeps risk on target without manual trades
Daily (sometimes intra-day) tax-loss harvesting boosts after-tax returns
Fractional shares and $0 minimums remove the entry barrier
Goal-based dashboards turn abstract numbers into tangible milestones

Cons

Asset menus are largely ETF-only—individual stock buyers must look elsewhere
Limited tactical control; you can tweak risk level, not hand-pick holdings
Hybrid plans cost extra, narrowing the fee gap vs. human advisors
Cash drag: some robos park 5–10 % in low-yield sweep accounts unless you opt out

Account Types You Can Automate

Account	Primary Benefit	Key Limitation
Taxable Brokerage	Unlimited deposits/withdrawals; TLH most impactful	Capital-gains taxes on withdrawals
Traditional IRA / Roth IRA	Tax-deferred or tax-free growth	Annual contribution limits; early-withdrawal rules
SEP / Solo 401(k)	High contribution caps for self-employed	Must calculate & fund via business income
529 College Plan	Tax-free education withdrawals	Non-qualified use triggers penalties
Trust or Joint Account	Estate planning, shared goals	More complex paperwork & state rules

Key Features to Compare

Advisory Fee + ETF Expense Ratio: All-in cost ≤ 0.50 % is competitive in 2025.
Tax-Loss Harvesting Cadence: Daily harvesting is now table stakes; some robos offer real-time TLH.
Cash Allocation & Sweep Yield: Look for 4 %+ APY or the option to reduce “required” cash to < 2 %.
Goal Customization: Multiple sub-goals (retirement, house, vacation) with separate risk tracks.
ESG or Thematic Tilt: Opt-in portfolios covering climate, tech, or faith-based mandates.
Human Advice Access: Unlimited CFP calls? Flat annual fee? Compare before you commit.
Account Minimum: Many flagship robos dropped to $0 in 2025, but hybrid tiers still require $25k–$100k.

Five-Step Robo Launch Plan

Clarify Your Time Horizon & Risk Tolerance: Retirement in 30 years differs from a wedding fund in 2.
Pick a Robo That Aligns: Pure automation for hands-off; hybrid if you want a human sounding board.
Automate Contributions: Weekly or monthly ACH transfers enforce disciplined dollar-cost averaging.
Review Goal Tracker Quarterly: Adjust deposit size or risk level if your life changes.
Optimize Taxes Each December: Export the robo’s realized-loss report, pair with other gains, and fill unused IRA/401(k) room.

Smart Usage Tips

Turn On Two-Factor Authentication: Robos hold both cash and securities—lock them down.
Minimize Cash Drag: If the platform parks > 5 % in cash, toggle the “aggressive” allocation or sweep to a high-yield account.
Use Beneficiary Designations: Skip probate by naming TOD/beneficiaries on each account.
Integrate With Budget Apps: Most robos sync to Mint, Monarch, or YNAB for holistic net-worth tracking.
Upgrade—Then Downgrade: Some hybrids waive the first year’s CFP fee; use it for a financial plan, then revert to pure robo to save on ongoing costs.

July 2025

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J.P. Morgan Self-Directed Investing