The 5 Best Robo-Advisors In The App Store - The Highest Paying Apps

How to Automate Your Investments with a Robo-Advisor

In 2022, investing is more important than ever. Unfortunately, it's also more complicated. With the cost of living rising steadily each year, it's essential to be able to invest safely, easily, and without needing to micromanage your money. But with seemingly endless options, it can be daunting to figure out where to start.

Fortunately, robo-advisors - apps that automate your investing strategy - have made investing more accessible and democratized access to complex financial instruments.

The popularity of robo-advisors has risen dramatically in the past decade, and the trend is likely to continue. A robo-advisor app may be an excellent option for you, but before downloading one, you may wonder which is the best suited for you.

Luckily, we've done a lot of the research for you! This article will explain what robo-advisors are, how they work, and what to remember when choosing one. It will also go over 5 of the most popular robo-advisors in the app store!

What is a robo-advisor?

Robo-advisors are precisely what the name sounds like: robots that serve as financial advisors. For the sake of simplicity, we will keep the definition of a robo-advisor as an application that automates your investments so that you don't have to make decisions and closely manage your money.

How do robo-advisors work?

When it comes to investing, everyone has different goals. Robo-advisors can help you meet yours by building a customized investment strategy based on your risk profile, income level, and preferences.

If you want a high-risk, high-reward strategy, you can select the highest risk tolerance on a sliding scale, and your robo-advisor will balance your portfolio under the hood. Then, if you want to dial that risk back, simply reset your preference to a lower risk tolerance, and your robo-advisor will rebalance your portfolio accordingly.

If you want to invest specifically with environmentally conscious companies, a robo-advisor can weigh your portfolio more heavily in ESG funds; likewise, if you want to invest in tech, healthcare, or any other sector.

They also allow you to set up recurring deposits to automate your investment strategy and remove the guesswork. 

The 5 Best Robo-Advisors in The App Store

The best robo-advisor for each individual depends on their particular goals and circumstances. This article highlights 5 of the best robo-advisors in 2022 and details how they work under the hood.

Outlet Finance

• Savings account alternative with 5% APY.
• No minimum account balance.
• Coming soon: low fee crypto onramp.

Outlet is a high-interest cash management solution that provides people with a simple way to receive an outstanding APY that more than doubles the other apps on this list. We wouldn't be in this business if we didn't think our strategy at Outlet was one of the best among the robo-advisors in the app store.

The Outlet app offers a seamless way to invest dollars in stablecoins and earn a steady APY by lending them out. When you invest with Outlet, you're leveraging the power of blockchain technology without having to handle anything technical by yourself. The lending is handled by Outlet and its partners, so all you have to do is deposit and earn!

Outlet makes generating a return through crypto easy, stress-free, and most importantly: reliable.

Betterment

• High APY, FDIC-insured savings account.
• Actively managed investment account.
• No minimum account balance.
• Access to financial planners for a fee.

Betterment is one of the products that started the robo-advisor revolution and still receives praise as one of the best. Betterment helps people invest in ETFs, which can be an excellent way to get diversified exposure to the stock market, allowing investors to purchase many stocks with just one transaction.

ETFs are managed by professionals, so you don't have to do the hard work of making investment decisions for yourself. They give you broad exposure to the market, even if you only have a small amount of money to invest.

Betterment is one of the best choices if you want exposure to the stock market but don't know where to start or don't want to manage your portfolio regularly. With no minimum account balance, Betterment is also ideal for young investors. 

Wealthfront

• One of the highest-yield, FDIC-insured savings accounts on the market.
• Actively managed investment account.
• Statistics and interactive charts to help you meet your retirement goals.
• Automated tax-loss harvesting to help you save on your tax return.

If there were a Mount Rushmore of fintech products, Wealthfront would be on it. Wealthfront combines a simple UX with complex financial products, giving its users access to a variety of investment strategies.

Users can create their own goals and risk preference and automate their investment strategy with recurring purchases. More advanced users can also invest in individual stocks of their choosing.

Another valuable feature Wealthfront offers customers is the ability to monitor their current investment strategy and project their savings into the future. This helps Wealthfront customers build a plan and stay on track for retirement.

The variety of features that Wealthfront offers makes this a potential one-stop shop for casual investors looking to make saving easy.

M1

• Highly customizable investment account.
• Individual stocks for more sophisticated investors.
• High APY, FDIC-insured savings account.

M1, similar to Wealthfront and Betterment, offers multiple features designed to make investing simple. While Wealthfront has a $500 minimum balance, M1 is more accessible with just a $100 minimum. 

M1 also features greater customizability and lower fees and is sometimes preferred by more sophisticated investors.

Betterment, Wealthfront, and M1 also offer traditional retirement accounts.

SoFi

• High APY, FDIC-insured savings account.
• Automated investment accounts.
• Access to financial planning services, loans, and mortgages.

SoFi probably has the widest range of features of each robo-advisor on this list; you may even call it the swiss army knife of fintech. However, it's not known for one feature in particular.

If you are looking for a one size fits all solution that combines the typical products of a traditional bank and the technology of a startup, SoFi may be right for you.

In addition to helping you customize and automate an investment strategy, SoFi also offers tools to help you take out and manage loans. If a mortgage is part of your overall financial picture, SoFi could be a great hub to manage your overall financial picture.

Robo-Advisors and Your Risk Profile

Assessing risk is one of the most important aspects of investing. This means knowing how much risk you are comfortable with based on your current financial circumstances and time horizon (when you want to cash out). It also means knowing what type of risk you are exposed to.

Certain people are ok with taking on considerable risk to try to reach higher payouts faster, while others prefer to take fewer risks and earn a safer yield.

A good question to ask yourself is, "how much can I afford to lose and still be ok?"

If you are young or are only investing a small percentage of your overall portfolio, you may be willing to take on more risk than if you are older or don't have significant savings yet.

Making The Most Money With Robo-Advisors

One of the most challenging parts of investing is mastering your emotions. It's common to see new and experienced investors buy when prices are high due to FOMO, then sell when prices have bottomed due to despair. This, of course, is the worst possible strategy.

When you get wrapped up in emotion, you tend to make irrational decisions. Unfortunately, the repercussions of these decisions could make or break your investments. Robo-advisors are valuable because they take the emotions out of investing. They let you set aside money in actively managed accounts and do all the decision-making for you, leaving your emotions on the sideline.

It's likely that no matter your experience level, it makes sense to allocate some of your portfolio to a robo-advisor. Picking the right one comes down to trust, goals, and whatever makes you feel comfortable.

Before settling on one, try out a few different options. Invest in small amounts, and see which app is best for you. You may end up with a mix of apps, and you may find you outgrow certain ones and replace them with more sophisticated options as you gain experience.

Even if you're not completely sure of yourself, robo-advisors are a great way to start your investing journey and learn through practice!