Robo VS Human, Page 4

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We asked 4 robo advisers and 4 human advisers for portfolios for the same investor

Published: Apr 27, 2015 9:14 a.m. ET

Slide 4 of 11

Wanderlust: Betterment has a real hankering for foreign shores, as its recommended portfolio puts 48% into non-U.S. stocks. That is above what’s suggested by the other robo advisers, the four humans and one possible benchmark, the American Association of Individual Investors’ moderate portfolio. (More on AAII’s take later.) But experts who warn American investors about home-country bias might prefer Betterment’s plan.

Vanguard-lust: Betterment isn’t so unique in its reliance on Vanguard, the index-investing pioneer. Betterment and two of the other robo advisers picked mostly Vanguard exchange-traded funds, and the four human advisers all recommended only Vanguard products. Schwab, with its own ETFs, was alone in using only a few Vanguard funds. “You can see why Vanguard is growing so much,” said Michael Kitces, Pinnacle Advisory Group’s research director.

Also read: Morningstar researcher sees ‘dark side of Vanguard’s success’

Fees: Investors pay a management fee of 0.3% for their first $10,000 with New York City–based Betterment, or $3 a month if they’re not auto-depositing at least $100 a month. The next $90,000 costs you 0.25%, and beyond that the fee is 0.15%.

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