Automated Investment Tools to Grow Your Wealth

Wax figurine sitting on a pile of coins

You’ve probably heard that making your money work for you is the only sustainable way to grow your wealth and reach financial freedom. However, investing is not something you do on a whim. If you need some assistance making investing easier, you’re in luck!

In this article, you’ll learn about the best automated investment tools for growing your wealth, from easy-to-use apps like Acorns to more sophisticated digital platforms like M1: Investing & Banking.

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What Is an Automated Investment Tool?

An automated investment tool, often called a “robo-advisor,” is a digital platform that uses algorithms to manage and allocate investments automatically based on an individual’s financial goals and risk tolerance.

These tools typically require minimal human interaction, making investment accessible and possibly less intimidating for beginners and those who prefer a hands-off approach.

Here’s how automated investment tools generally work:

  • Risk assessment: You complete a questionnaire to review your financial situation, long-term goals, and risk tolerance.
  • Portfolio construction: Based on your responses, the automated investment tool recommends a diversified investment portfolio, which usually consists of a mix of stocks, bonds, and other assets to grow wealth.
  • Automatic management: The automated investment tool automatically manages your portfolio, conducting tasks such as rebalancing, tax loss harvesting, and reinvesting dividends.
  • Monitoring: Your investments are monitored continuously, and adjustments are made to align with your financial goals without any real effort.

 

 

Are Automated Investment Tools Safe?

The safety of these tools includes two key aspects: security and investment risk.

  • Security: Most reputable automated investment platforms use high-level encryption and are regulated by financial authorities, such as the U.S. Securities and Exchange Commission (SEC), which provides a supplemental layer of safety to data protection and operational standards.
  • Investment risk: Like any investment, those managed by automated tools are subject to market risks. The safety of your investment depends on market conditions, the performance of the assets in your portfolio, and your investment horizon.

In general, while automated investment tools offer convenience and can reduce the barrier to entry for beginner investors, it’s vital to perform your due diligence, choose a trusted provider, and ensure it matches your financial strategy and risk tolerance.

Best Automated Investment Tools: Quick Overview

If your lunch break is about to end, here’s the most important part of this article – a quick overview of the best automated investment tools:

  • Best for women investors: Ellevest;
  • Best overall: Wealthfront;
  • Best for beginners: Betterment;
  • Best for low costs: SoFi Automated Investing;
  • Best for sophisticated investors: M1: Investing & Banking;
  • Best for those who can’t save: Acorns.

Wealthfront

  • Account minimum: $500;
  • Fees: 0.25% for most accounts;
  • Available on: Website – Google Play – Apple App Store.

Wealthfront is an app that offers automated, algorithm-driven financial planning services with little human supervision. It provides a diverse range of investment options, including stocks, bonds, and real estate, tailored to your risk tolerance and financial goals.

This investment app also features tools for daily tax-loss harvesting and financial planning for large expenditures like college and home buying. With a minimal fee structure and a $500 minimum investment, it is accessible to many investors.


Acorns

  • Account minimum: $0;
  • Fees: $3-$5/month;
  • Available on: Website – Google Play – Apple App Store;

Acorns is an automated investment app made for new investors and those looking to start saving. It utilizes a micro-investment strategy in which purchases are rounded up to the nearest dollar, and the spare change is invested.

The app invests in a portfolio of ETFs to help users grow their wealth incrementally. It also offers retirement account options like IRAs, educational content to enhance financial literacy and a family plan that covers children’s accounts. With a low barrier to entry and a simple fee structure, Acorns makes investing approachable for everyone.

M1: Investing & Banking

  • Account minimum: $100;
  • Fees: 0% ($36/year for a premium account);
  • Available on: Website – Google Play – Apple App Store;

M1 combines the features of a traditional investment platform and a digital bank. It allows users to create and manage a customizable investment portfolio while offering banking services like checking accounts and lines of credit.

The app offers automated rebalancing, fractional shares, and a unique borrowing feature against your portfolio at competitive rates. The service is free with optional premium upgrades, appealing to active and new investors.

Ellevest

  • Account minimum: $0 for Digital Plan; $1M for Private Wealth Management;
  • Fees: $12/month for the Ellevest Digital Plan; fees vary for Ellevest Private Wealth;
  • Available on: Website – Google Play – Apple App Store;

Ellevest is explicitly designed for women investors, aiming to address gender-specific financial challenges through its automated investment platform. The app offers personalized investment portfolios based on specific life goals and current financial situations, with a focus on ethical investment options.

Ellevest also provides access to financial advisors and career coaches, enhancing its user’s financial literacy and empowerment. It charges no minimum account balance and has a tiered membership system with varying service levels and fees.

SoFi Automated Investing

  • Account minimum: $1;
  • Fees: $0;
  • Available on: Website – Google Play – Apple App Store;

SoFi provides an automated investing solution without management fees, making it an attractive option for cost-conscious investors. The platform offers automatic rebalancing, dividend reinvesting, and professional advice, catering to seasoned investors and beginners.

Members benefit from complimentary access to certified financial planners and exclusive educational content. Additionally, SoFi allows the integration of automated investing with other financial services offered by SoFi, creating a comprehensive financial management ecosystem.

Betterment

  • Account minimum: $0 ($10 to start investing);
  • Fees: 0.25% (annual) for investing plan accounts with at least $20,000;
  • Available on: Website – Google Play – Apple App Store;

Betterment is one of the pioneers of robo-advising, offering automated ETF-based portfolios that are globally diversified and designed to maximize returns. The platform adjusts the investment mix with automatic rebalancing and tax-efficient strategies like tax-loss harvesting.

Betterment provides tiered services, including premium access to certified financial planners. Its primary service has no account minimum, making it a good entry point for new investors.

Key Takeaways

In conclusion, the landscape of automated investment tools is diverse and caters to a wide range of investor needs and financial goals. From Ellevest’s focus on women’s unique economic challenges to Wealthfront’s advanced tax-loss harvesting features, each platform offers distinct advantages that can enhance an investor’s experience.

As the financial technology sector continues to evolve, these platforms exemplify the growing accessibility and personalization of investing, promising to reshape our approach to personal finance in increasingly efficient and inclusive ways.