Robo Advisors with the Most AUM in 2020
In the financial advisory world, assets under management, or AUM, is a key metric. Most advisors, both traditional and robo-advisors, earn their income as a percentage of AUM. The greater the amount of assets under management, the more income for the company.
Experts estimate that robo-advisor AUM growth will continue to expand and increase, due to low management fees and sound investing strategy. A Statistica report, discussed below, states that global robo-advisor assets under management grew nearly 50% during the previous year.
As robo-advisors continue to grow in popularity, it’s interesting to track the growth of robo advisors’ AUM. It is no surprise that the largest robo-advisor AUM growth is concentrated in Vanguard and Schwab’s robos, two large investment brokerage houses with ample existing clients under roof. The Vanguard AUM clearly trumps Charles Schwab’s AUM, although both firms are substantially ahead of the stand-alone robos:
- Vanguard robo-advisor AUM: $161 billion
- Schwab Intelligent Portfolios AUM: $40.7 billion
The 3rd through 5th places go to the oldest stand-alone robo-advisors: Betterment, Wealthfront and Personal Capital. The largest stand-alone robo-advisors are also the oldest. While Wealthfront and Betterments assets under management are running neck-in-neck in the robo-advisor AUM competition.
- Betterment AUM: $22 billion
- Wealthfront AUM: $21 billion
- Personal Capital AUM: $12.3 billion
Robo-Advisors With the Most AUM – 2020
|Robo-Advisor||Assets Under Management||Number of Accounts|
|5. Personal Capital||$12.3 billion AUM||22,000 paid users (over 2.4 million using the free tools)|
|4. Wealthfront||$21 billion AUM||400,000|
|3. Betterment||$22 billion AUM||500,000|
|2. Schwab Intelligent Portfolios||$40.7 billion AUM||360,000|
|1. Vanguard Personal Advisor Services||$161 billion AUM||Not disclosed (Vanguard serves over 30 million investors throughout their company)|
In this updated 2020, “Robo-Advisors with the Most AUM” the top 5 robo-advisors remains the same as last year, although each has grown their users and assets!
Below is a synopsis of the top five most popular robo advisors with the most assets under management, how much money investors have entrusted them (their current AUMs) and differentiating features that set each apart from the others.
In the next section, we will include information about nine other robo-advisors with high AUM numbers.
5. Personal Capital
Assets managed as of December 31, 2019: $12.3 billion AUM
Personal Capital is 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.
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 holds up.
Click here for access to exclusive free Personal Capital Financial Management Software. (I’ve used it for years!)
Although the basic level of the service is free, the company offers Personal 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 accounts.
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. While their comprehensive investment and money management dashboard is free.
Assets managed as of September 2019: $21 billion in AUM
Wealthfront is a low-cost leader in the robo advisory space. 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. Path is Wealthfront’s all digital financial advisor.
Visit the Robo-Advisor Selection Wizard – answer 4 questions and 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.
The service is free for accounts valued at $5,000 or less with this link. Wealthfront charges 0.25% AUM for account values over $5,000. 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.
Wealthfront also offers lending and cash management solutions. The Wealthfront platform also offers the most comprehensive digital financial planning tool that we have seen.
Assets managed as of March 2020: $22 billion AUM
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.
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 the Goldman Sachs Smart Beta portfolio.
There is no minimum account balance required for Betterment investors who use the company’s digital plan. Betterment charges only 0.25% AUM for accounts valued up to $2 million for its Digital Plan, dropping to 0.15% AUM for accounts valued over this amount. Betterment also offers a Premium 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 access to Certified Financial Planners.
2. Schwab Intelligent Portfolios
Assets managed as of December 31, 2019: $40.7 billion in AUM
Schwab was the best performing robo-advisor for 2017. The second largest robo-advisor from powerhouse Charles Schwab is the only one of the top five robo-advisors that offers a Portfolio option with zero management fees: their basic Schwab Intelligent Portfolios offering. 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.
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, 401k rollovers, taxable accounts, and trusts.
For investors seeking more personalized services, newly rebranded Schwab Intelligent Portfolios Premium also provides unlimited human financial advisor consultations like Personal Capital or 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.
We also appreciate the opportunity to stop into a branch to discuss account related questions.
1. Vanguard Personal Advisor Services – The Winner
Assets managed as of December 31, 2019: $161 billion
Holding the 1st place spot for the last three years is Vanguard Personal Advisor Services. Vanguard is a product of legendary John Bogles’ index fund house. As of July 31, 2019, the entire Vanguard Company managed $5.7 trillion in global assets for more than 20 million investors across the globe.
The Vanguard robo-advisor now offers 2 investment options:
- Vanguard Personal Advisor Services – A robo-advisor that integrates computerized investment management with human financial advisor guidance.
- Vanguard Digital Advisor – This new offering is similar to the traditional robo-advisors and provides investors with low-fee investment management driven by your risk level and goals.
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 Digital Advisor
The new Vanguard Digital Advisor recently entered crowded “basic” robo-advisor arena.
Like many of its robo-advisor competitors the digital advisor creates a well-balanced investment portfolio that reflects your goals, age, and risk level. At present, it’s best differentiating features are:
- Low 0.15% investment management fee.
- Use of low-fee Vanguard ETFs (exchange traded funds).
- Access to the well-established Vanguard brand.
- New features coming soon: emergency fund and debt management assistance.
In addition to the largest robo-advisors, following are nine other robo-advisors that responded to our request for assets under management information.
Understand that just because a digital investment manager oversees a large amount of investment dollars, doesn’t make that company the best 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.
More Robo-Advisor AUM Data – Other Players in the Digital Advisor Sphere
Following are other important robo-advisors who chose to report their AUM data. For more information about any of the robo-advisors, click on the link to read the complete review.
More Robo-Advisor AUM Data – 2020*
|Robo-Advisor||Assets Under Management||Number of Accounts||Robo-Advisor Review Articles|
|Wealthsimple||$5 billion AUM||175,000||Wealthsimple Review|
|Blooom||$3.5 billion AUM||4,800||Blooom Review|
|TD Ameritrade Essential Portfolios||$1.7 billion AUM (2019) – 2020 data not available||Not available||TD Ameritrade Robo Advisors Review|
|M1 Finance||$1 billion AUM||200,000||M1 Finance Review|
|United Income||$746 million AUM||750||United Income Review|
|Ellevest||$361 million AUM||29,400+||Ellevest Review|
|Axos Invest Managed Portfolios (formerly WiseBanyan)||$206 million AUM||32,200||Axos Invest Review|
|Zacks Advantage||$100 million AUM (2019)||500||Zacks Advantage Review|
|Validea Legends Advisor||~$5 million||~50||Validea Legends Advisor Review|
Robo-Advisor Global AUM Growth
There’s no doubt that robo-advisors are here to stay. In September, 2019 Statistica estimates the global robo-advisor assets under management at $1.4442 trillion, a 47% year-over-year increase. The report projects an average annual AUM growth rate of 21% with total assets managed at $2.552 trillion by 2023.
While U.S. robo-advisor assets under management is estimated at $1.048 trillion.
By 2023, the number of global robo-advisor users is expected to reach 147,018,400.
Although, less meaningful, the average assets under management per user is estimated to be $20,452 in 2020. This number is less valuable without the context of the entire distribution of returns which reportedly includes a disproportionate percent of smaller accounts.
Takeaway – Does Robo-Advisor AUM Matter?
Each digital financial manager differs in their offerings. There are robo-advisor advantages and disadvantages for 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, robo-advisors share many of the same features:
- Account rebalancing
- Relatively low initial investment amount
- Low fees to 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.
*Updated: April 22, 2020 (All data is most current AUM available.)
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