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Morningstar Publishes Robo-Advisor Landscape Report Finding That Digital Investment Advice Can Play an Important Role for Smaller Investors
Vanguard and Betterment stand out as the strongest overall offerings among 16 robo-advisors evaluated CHICAGO, March 31, 2022 /PRNewswire/ -- Morningstar,
About this update from Morningstar, Inc.
[{"type":"text","content":"Vanguard and Betterment stand out as the strongest overall offerings among 16 robo-advisors evaluated\nCHICAGO, March 31, 2022 /PRNewswire/ -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today published its first \"Robo-Advisor Landscape\" report, which examines the current digital advice landscape in the United States by providing a detailed evaluation of 16 U.S.-based robo-advisors.\nMorningstar's manager research analysts qualitatively assessed each robo-advisor on the features and benefits that are most likely to help investors reach their financial goals, including fees, quality of investment advice, and breadth of financial planning tools. Those assessments took the form of \"High,\" \"Above Average,\" \"Average,\" \"Below Average\" and \"Low.\"\n\"Digital investment advice can be a good option for smaller investors who may not be able to afford a traditional financial advisor. However, there is work to be done on the level of transparency, higher fees in some cases, and financial planning tools that support investors with varied investing goals. We hope this guide will make it easier for investors to choose a robo-advisor and encourage the industry to improve,\" said Amy C. Arnott, portfolio strategist at Morningstar and lead author of the report. \nThe Robo-Advisor Landscape report is available here. Key findings from the report include:\nThe typical robo-advisor playbook includes portfolios composed of passively managed, low-cost exchange-traded funds with a range of risk levels. However, asset allocation ranges vary, and many providers add quasi-active strategies, such as factor tilts, strategic beta, and direct indexing.The median advisory fee among robo-advisors surveyed was 0.30% of assets per year—making them significantly cheaper than traditional financial advisors' typical 1% levy.Vanguard Digital Advisor and Betterment stood out as the strongest overall offerings based on the assessment criteria, including low cost, transparency, reasonable asset allocation approach, and a broad range of financial planning tools. Fidelity Go, Schwab Intelligent Portfolios, SigFig, and Wealthfront also received above-average scores.Titan, E*-Trade Core Portfolios, Merrill Edge Guided Investing, Morgan Stanley Access Investing, UBS Advice Advantage, and Wells Fargo Intuitive Investor sc...