A robo-adviser assigns you a model portfolio of index funds from a questionnaire and rebalances it automatically for roughly 0.25%–0.50% of assets a year. For one account, one income and a long horizon that is enough. A human fee-only adviser costs more — ours is 1.5%–2.0% — and earns it only where the problem is bigger than the account: a pension, a business, uneven income, the start of withdrawals, or a household with more than one of those.
What each one actually does
| Robo-adviser | Human adviser (fee-only) | |
|---|---|---|
| Builds the portfolio | Algorithm assigns a model of index ETFs from a questionnaire | A person, from a written policy agreed with you |
| Rebalances | Automatically | On a schedule and on judgement |
| Tax-loss harvesting | Automated, daily on some platforms | Done where it helps; skipped where it doesn't |
| Typical fee | About 0.25%–0.50% of assets a year, plus fund costs | About 1%–2% of assets a year; ours is 1.5%–2.0% |
| Minimum | $0 to a few thousand dollars | Often $250,000+; ours is $0 |
| Plans around a pension | No | Yes — CalPERS, CalSTRS, LACERA, survivor elections |
| Sets up a business retirement plan | No | Yes |
| Talks you out of selling in a crash | A pop-up | A phone call |
| Coordinates with your CPA and attorney | No | Yes |
A robo-adviser is a good product. For a straightforward situation — one income, one account, a long horizon, no pension, no business — an automated portfolio of index funds at a quarter of a percent is close to the cheapest competent investing available, and this page will not pretend otherwise. The figures above are the providers' published schedules as of this page's date; check the current ones.
Where the algorithm is enough
- You are accumulating, not withdrawing, and the account is the only one that matters.
- Your income is a salary, your plan is a 401(k) with a match, and the question is "what do I buy."
- You would rather not talk to anyone, and you will not sell in a downturn. Be honest about the second one.
Where it is not
- A pension is in the picture. A CalSTRS or CalPERS benefit changes how much the rest of your savings has to produce and how it should be invested. No questionnaire asks.
- You own a business. The plan you sponsor, the entity you pay yourself through, and your own retirement are one problem. Robo-advisers manage accounts, not problems.
- Income arrives unevenly — tips, commissions, 1099 work, seasons. The savings rule matters more than the fund selection, and someone has to build it with you.
- Withdrawal has started. Sequence risk, Social Security timing, Roth conversions in low-income years and required distributions are decisions, not allocations.
- Family money is family. Parents to support, children to plan for, a spouse whose account is at a different employer. The plan is a household, and the household is not a risk score.
About the fee gap
Ours can be higher. On a $100,000 account, a 1.5% rate is $1,500 a year against a robo-adviser's $250. If the only thing you need is a diversified portfolio, that gap is not worth paying, and we will say so on the first call. What the fee buys is the work in the second list above, done by a fiduciary who is paid by you and no one else. The fee analyzer will show you the compounding cost of any fee; use it on ours.
Common questions
Is a robo-adviser a fiduciary?
The firms behind the major robo-advisers are registered investment advisers, so yes, in the legal sense. The duty is discharged by the algorithm and the disclosures; there is no person applying it to your circumstances.
Can I use both?
Yes, and people do — a robo account for a simple goal, an adviser for the household plan. The advice on what belongs where is itself part of what a fee-only adviser is for.
Do you use index funds too?
Largely, yes. The portfolio construction is not the expensive part of advice and we do not pretend it is. Index vs active, with the evidence →
What does Aduna Capital charge?
1.5%–2.0% of assets per year, no minimum to open, $50 a month after. The published schedule →
Not sure which you need?
Fifteen minutes. If a robo-adviser is the right answer for you, that is what you will hear.