I am a relatively new follower, but in scrolling through your page I thought I’d be interesting comparing the top robo advisors like SoFi, wealthfront, and betterment to the likes of a common index fund. I have had this question with my current robo advisor, and no one can seem to give me a clear answer, nor will the others when I ask. Thanks for all you do!
Hey Zac!
Well, all of those robo advisors DO invest in index funds on your behalf. The benefit they offer, is basically choosing which index funds, the asset allocation, rebalancing and potentially “tax loss harvesting”.
All in all, that’s kind of fine tuned stuff. If you’re comfortable with picking a 3-fund portfolio of index funds or a target date index fund for yourself, go for it and you can avoid any fees associated with the robos. If you’re new and that’s confusing to you, then go with the robo. The fees they charge are actually really low and the benefit they provide is probably well worth it compared to possibly messing something up doing it yourself. But broad strokes robos DO invest in index funds (usually ETFs) so the best case performance will be very close to DIY with index funds.