Five-year returns from most robo-advisors range from 2%–5% per year.1 And the performance of these automated investment services can vary based on asset allocation, market conditions, and other factors. With so many options available, how do you decide which robo-advisor offers the most value?
Start by looking beyond performance and focusing on the parts of the service you can control. Here's what to look for when assessing a robo-advisor's value.
While the number of robo-advisors available can be overwhelming, remember you're in the driver's seat when it comes to choosing one. By considering costs, personalization, and underlying philosophies, you're looking at the value robo-advisors add beyond performance to find the service that's best for you.
Learn about the value Vanguard Digital Advisor® offers.
1Condor Capital Wealth Management, 2023. The Robo Report.
2Morningstar, 2023. Robo-Advisor Landscape report.
All investing is subject to risk, including the possible loss of the money you invest.
There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.
Vanguard Digital Advisor's services are provided by Vanguard Advisers, Inc. ("VAI"), a federally registered investment advisor. VAI is a subsidiary of The Vanguard Group, Inc. ("VGI"), and an affiliate of Vanguard Marketing Corporation ("VMC"). Neither VGI, VAI, nor its affiliates guarantee profits or protection from losses.
Enrollments in Vanguard Digital Advisor require at least $3,000 in each Vanguard Brokerage Account. For each account you wish to enroll, the entire balance must be in certain allowable investment types (based on eligibility screening by Digital Advisor at the time of enrollment) and/or the brokerage account's settlement fund. We'll typically invest your assets in a portfolio of Vanguard ETFs, all of which are commission-free online through a Vanguard Brokerage Account. Vanguard Brokerage Accounts are offered through and maintained by VMC, a registered broker-dealer and member FINRA and SIPC. If you decide to manage your investments on your own, you can buy and sell Vanguard ETF Shares through Vanguard Brokerage Services or another broker (which may charge commissions).
Vanguard Digital Advisor is an all-digital service. Digital Advisor charges Vanguard Brokerage Accounts an annual gross advisory fee of 0.20% for its all-index investment options and 0.25% for an active/index mix. The gross advisory fee is reduced by a credit of the actual revenue VGI or its affiliates retain from investments in each managed account, resulting in a net advisory fee that will be the actual fee collected from your account. The actual net fee amount will vary based on your unique asset mix, investment setting, account types, and specific investments in each managed account. Note that this fee doesn't include investment expense ratios—such as fees paid to the funds' third-party managers, which aren't credited. While we generally recommend using low-cost Vanguard funds to build your portfolio, it's important to be aware that actively managed funds will have higher expense ratios than index funds. You should consult your plan fee disclosure notice for the applicable annual gross advisory fees that apply to your 401(k) account. For more information, please review VAI's Form CRS and the Vanguard Digital Advisor Brochure (PDF).
