Robo-advisors With the Most Assets Under Management -2021 (2023)

Top Robo Advisors by AUM

In the financial advisory world, assets under management, or AUM, is a key metric. Most financial advisors, both traditional and robo-advisors, earn their income as a percentage of AUM. The largest robo advisors by aum, in most cases, are or will become the most profitable.

Although global in scope, the US robo advisor market-share is 75%, dominated by the biggest names. Vanguard continues in the top spot with Schwab, a distant second. It is no surprise that the largest robo-advisor AUM growth hails from two large investment brokerage firms with ample existing clients. The Vanguard robo-advisor AUM clearly trumps Charles Schwab’s Intelligent Portfolios AUM, although both firms are substantially ahead of the stand-alone robos. The Schwab acquisition of TD Ameritrade and its Essential Portfolios is certain to boost Schwab’s robo advisory aum.

*Disclosure: Please note that this article may contain affiliate links whichmeansthat – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link.

The 3^rdthrough 5^thplace robo-advisor AUM winners go to the oldest stand-alone robo-advisors. Betterment’s AUM and Wealthfront’s assets under management top the stand-alone robo-advisory universe rounding out the third and fourth places. And the leader in free investment management tools, and fifth largest robo advisor is Personal Capital, an Empower brand.

Experts estimate that robo-advisor AUM growth will continue to expand and increase, due to low management fees and sound investing strategy. CNBC reports that robo-advisors have grown 30% since 2019 – up to $460 billion assets under management in 2020. Analysts predict continued growth, with some estimating that the robo-advisor industry will reach $1.2 trillion by 2024.

Largest Robo-Advisors by AUM

In this updated 2021 “Robo-Advisors with the Most AUM” article the top 5 robo-advisors remains the same as last year, although most have grown their users and assets!

Below is an overview of the top five most popular robo advisors with the most assets under management, and differentiating features that set each apart from the others.

Next, we will include information about seven additional popular robo-advisors and their assets under management.

5. Personal Capital

Assets managed as of April 31,2021: $18.9 billion AUM

Personal Capitalis an automated investment manager with a free investment management platform. The free money management software offers a complete view of your financial picture all in one place. Personal Capital was recently acquired by Empower Retirement.

The Personal Capital AUM are readily accessible on their website, making it easy to track their growth.

Personal Capital Free Financial Management Tools

The site provides a way to view bills, income, debt, investments, and more from a single location. Personal Capital allows its customers to link their existing banking accounts to the site, which gives clients the ability to track their spending, retirement savings and their portfolio’s performance.The site also offers digital advice based on your investments and financial accounts.Their free retirement planner allows users to test various scenarios to find out how their assets and income hold up.

You must click the button below and sign up for the FREE investment, budgeting, and retirement tools at Personal Capital. (I’ve used it for years.)

Personal Capital Advisors

Although the basic level of the service is free, the company offersPersonal Capital Advisors, a paid comprehensive automated investment advisory service with dedicated financial advisors. The paid service requires a $100,000 minimum account balance. The investment management approach is unique, with a sector-based asset allocation and access to individual stocks. Personal Capital also provides typical rebalancing and tax-loss harvesting along with dedicated Certified Financial Planners for all clients with managed account.

According to Personal Capital’s performance data, the robo-advisor has been performing as well as, if not better than, comparative benchmarks in 3 out of 5 portfolios since their inception.

Personal Capital also offers a high yield cash account, and additional services for the wealthiest investors. Personal Capital’s fees start at .89% for accounts up to $1 million and decline as portfolio values grow. However, theircomprehensive investment and money management dashboard is free.

Personal Capital Review

4. Wealthfront

Assets managed as of May 2021: $25 billion in AUM

Wealthfront is the top all digital robo-advisor. Path, the unique online financial planner sets the company apart. They offer great research, low fees, and index matching returns based on individuals’ unique risk profiles. The site offers daily tax-harvesting, direct indexing, and automatic rebalancing.

Wealthfront recently launched customization features enabling users to add, substitute, or create new ETF portfolios. This new feature is good for users who want the benefits of investment management along with the opportunity to choose funds.

Wealthfront users top 440,000 clients, which is quite impressive for an “all-digital” robo-advisor.

Click below and visit theRobo-Advisor Selection Wizard– answer 4 questions to find out the best robo-advisor for you.

Wealthfront allows you to see exactly how much to save and invest for the future. It also shows you how life events and changes will impact your account. The platform provides a complete financial planning picture and answers your financial questions without having to talk to a traditional financial advisor.

Click on the link below to get free investment management for your first $5,000.

Wealthfront charges 0.25% AUM for accounts valued over $5,000. Investors will need at least $500 to get started.

Like most robo advisors, Wealthfront invests clients’ funds in exchange-traded funds that track 11 major asset classes and offers multiple account types. Larger accounts qualify for direct indexing or the opportunity to invest in individual stocks. Users can also customize existing portfolios by adding additional ETFs. Or, users can create their own ETF mix and Wealthfront will manage it.

Wealthfront also offers lending and cash management solutions.

We love the Path comprehensive digital financial planning tool. It’s the best that we have seen.

Wealthfront Review

3. Betterment

Assets managed as of May 14, 2021: $26.7 billion AUM

The third largest robo-advisor, Betterment offers digital investment management and financial advisors. Like most of the leading robo-advisors, Betterment offers investors automated tax-loss harvesting, rebalancing,and tax-efficient techniques. A unique Betterment feature is the opportunity for all clients to text questions to and receive answers from a human financial advisor. Betterment also offers low-cost financial planning packages which enable everyday investors to meet with a professional to review their investments, plan for college, or other discuss money questions.

How many customers does Betterment have? As of May 2021, Betterment users top 615,000 clients. Betterment’s average account size is approximately $44,000.

In addition to Betterment’s growing AUM are its innovations. This digital advisor is at the forefront of robo-investing by offering not only access to financial advisors but socially responsible, smart beta and income portfolio investment options. Not one to relax, Betterment consistently releases new financial products to better serve their clients, including a low-cost a la carte financial planning packages, a high yield savings account, and theGoldman Sachs Smart Beta portfolio.

In March 2021, Betterment acquired Canadian-based rival Wealthsimple’s U.S. based customers. The integration is expected to be completed by summer and will add to Betterment’s user growth.

Betterment Digital

There is no minimum account balance required forBettermentinvestors who use the company’s digital plan. Betterment charges only 0.25% AUM for accounts valued up to $2 million for itsDigital Plan, dropping to 0.15% AUM for accounts valued over this amount. The basic fee is on a par with Wealthfront’s annual management fee.

Betterment Premium

Betterment also offers aPremium Plan, which requires a $100,000 minimum investment and charges a 0.40% AUM. This fee drops to 0.30% AUM for accounts valued over $2 million. Betterment Premium offers unlimited access to Certified Financial Planners.

Betterment Review

2. Schwab Intelligent Portfolios

Assets managed as of March 2021: $63.6 billion in AUM

Rounding out the list of largest robo advisors by AUM is second largest robo-advisor from powerhouse Charles Schwab. It is the only one of the top five that offers a Portfolio option with zero management fees: the basic Schwab Intelligent Portfolios option.

Schwab Intelligent Portfolios

The basic, digital investment manager doesn’t charge management fees. The minimum balance to open an account with Schwab Intelligent Portfolios is $5,000. Like other robo advisors, Schwab Intelligent Portfolios offers tax-loss harvesting, rebalancing, and other features. This option requires a small cash allocation to all it’s portfolios.

The service earns management fees from its own ETFs and other third-party funds that it recommends to its customers. The site offers clients investments in individual retirement accounts (IRA), 401k retirement plans,401krollovers, taxable accounts, and trusts.

Bonus:Robo-Advisors With Human Financial Advisors

Schwab Intelligent Portfolios Premium

For investors seeking more personalized services, the Schwab Intelligent Portfolios Premium also provides unlimited human financial advisor consultations like Personal Capital Advisors and Betterment Premium. Other add-ons include a comprehensive financial plan and interactive online planning tools. This service requires $25,000 AUM and charges a one-time $300 planning fee and a $30 per month, subscription model. For larger account holders, the fee is quite reasonable. Users with $100,000 AUM will pay 0.36% AUM (excluding $300 set up fee), significantly below the average amount charged by traditional financial advisors.

We also appreciate the opportunity to stop into a branch to discuss account related questions.

Schwab Intelligent Portfolios Review

1. Vanguard Personal Advisor Services – The Winner

Assets managed as of March 31, 2021: $231 billion

Holding the 1^stplace spot for the last four years is Vanguard Personal Advisor Services. Vanguard is a product of legendary John Bogles’ index fund house. As of January 31, 2021, the entire Vanguard Company managed $7.2 trillion in global assets for more than 30 million investors in 170 countries across the globe.

Similar to Schwab and Betterment, the Vanguard robo-advisor offers 2 investment options. Vanguard Personal Advisor Services is robo-advisor that integrates computerized investment management with human financial advisor guidance. Vanguard Digital Advisor is similar to the traditional robo-advisors and provides investors with low-fee investment management driven by your risk level and goals.

Vanguard Digital Advisor

Similar to competitors, the the digital advisor creates a well-balanced investment portfolio that reflects your goals, age, and risk level. At present, its best differentiating features are a low 0.15% investment management fee, the use of low-fee Vanguard ETFs, and access to the well-established Vanguard brand. The $3,000 minimum might be steep for new investors. For users seeking broad diversification, the Vanguard Digital Advisor four-fund portfolios might not be the best match.

The basic plan expects to add new debt management help and an emergency fund option.

Vanguard Personal Advisor Services

Humans lead Vanguard Personal Advisor Services. Financial professionals and their clients create, manage, and rebalance their investment portfolios based on the customer’s needs and financial situation.

Vanguard Personal Advisor Services requires a $50,000 minimum account balance, which accounts for the hands-on approach not typically seen in the robo advisory community. Vanguard charges a 0.30% AUM fee, which drops as your assets increase. There may be additional commissions or other fees depending on the investments you and the advisor choose. For accounts that have less than $500,000 invested, clients have access to a team of advisors instead of a dedicated financial planner to work with you.

Vanguard Personal Advisor Services

Humans lead Vanguard Personal Advisor Services. Financial professionals and their clients create, manage, and rebalance their investment portfolios based on the customer’s needs and financial situation.

Vanguard Personal Advisor Services requires a $50,000 minimum account balance, which accounts for the hands-on approach not typically seen in the robo advisory community. Vanguard charges a 0.30% AUM fee, and there may be additional commissions or other fees depending on the investments you and the advisor choose. For accounts that have less than $500,000 invested, clients have access to a team of advisors instead of a dedicated financial planner to work with you.

Vanguard Personal Advisor Services Review

In addition to the largest robo-advisors, following are seven other robo-advisors that responded to our request for assets under management information. Wealthsimple dropped off the list, due to the acquisition of its US clients by Betterment. The TD Ameritrade Essential Portfolio robo-advisory clients have been subsumed by Schwab Intelligent Portfolios, due to the acquisition of TD Ameritrade by Schwab.

Understand that just because a digital investment manager oversees a large amount of investment dollars, doesn’t make that company thebest robo-advisor for you. I have accounts with several robo-advisors, not all on the top 5 list.

We appreciate the smaller platforms choosing to share their AUM data.

Largest Robo-Advisor AUM – Runners Up

Following are other important robo-advisors who chose to report their AUM data. With the exception of Axos Invest, all of the robo-advisors substantially grew their AUM this year. For more information about any of the robo-advisors, click on the link to read the complete review.

Robo-Advisor Global AUM Growth

There’s no doubt that robo-advisors are here to stay. Many of the robo-advisors on this list grew exponentially over the last year; those that didn’t were few and far between.

Part of the expansive 2021 robo advisory growth can be attributed to the unusually strong returns of the financial markets. During 2020, the S&P 500 grew more than 16% while the tech-heavy Nasdaq surpassed 43% annual growth. Although, offsetting the robust stock returns were paltry fixed income returns from bond funds.

The robo-advisory growth is leaning towards those digital investment advisors that also offer human financial advisor access.

A February 10, 2021, report by Allied Market Research estimated that hybrid robo-advisors, which held approximately 80% of the entire 2019 robo market globally, will continue to be dominant in this industry. Supporting this claim is a report by Statistia, which estimates that assets under management with robo-advisors grew 38.5% in 2021, and that AUM numbers are expected to continue growing at a rate of 20.11% between now and 2025.

Allied Market Research also noted that COVID-19 actually helped robo-advisors grow, with many clients preferring these asset management tools during a time when the economy was in major flux.

Although less meaningful, Statista estimates that the average assets under management per user is $4,669 in 2021. This number is less valuable without the context of the entire distribution of returns which reportedly includes a disproportionate percent of smaller accounts.

FAQ

Takeaway – Does Robo-Advisor AUM Matter?

Each digital financial manager differs in their offerings. There arerobo-advisor advantages and disadvantagesfor each investor. To decide which robo-advisor is best, it’s important to categorize what services you’re seeking, how much money you have to invest, and whether you need access to human advice, or not.

Despite their distinctions, most robo-advisors share many of the same features:

• Account rebalancing
• Relativelylow initial investment amount
• Low feesto manage the account
• A variety of investment options – in line with investors’ risk levels

Use this robo-advisor AUM data in conjunction with other research to guide your digital investment advisor decision.

As the assets under management in robo-advisors continue to rise, more companies will enter the market, and both investment and advisory choices will grow.

*Updated: (All data is most current robo advisor AUM and account available.)

Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through theaffiliate link. That said, I never recommend anything I don’t believe is valuable.

I have accounts with Schwab Intelligent Portfolios, Personal Capital, and M1 Finance.