XL dev

Is a Robo-Advisor Right for Your Investment Portfolio?

Robo-advisors are growing in popularity throughout the investment sector of the financial industry. Find out if a robo-advisor is right for you.

https://tickertapecdn.tdameritrade.com/assets/images/pages/md/Is a robo-advisor right for your investments
4 min read
Photo by

Key Takeaways

  • Consider a few questions to determine your investment advisor preference: traditional, or robo-advisor
  • Learn how so-called robo advisors work and their potential benefits

Chances are, you’ve heard of the “robo-advisors” that are taking the investing world by storm. But what exactly are they? And are you and your portfolio ready for a digital facelift? Let’s tackle these questions and more. 

What is a robo-advisor?

Robo-advisors are automated investment portfolios that use algorithms to consider your unique needs against outside factors and then automatically allocate and periodically adjust your portfolio to help keep you on track. This is different from target date funds, which do not have the same capabilities.

What is a robo advisor - unique needs vs outside factors

Are people really using them?

Despite being virtually nonexistent just five years ago, robo-advisors are rapidly growing in popularity—and they’re expected to keep growing in the years to come.

Growth in Assets Under Robo Management (in Billions)

How do robo-advisors work?

Despite its name, a robo-advisor isn’t a self-aware investing machine—there are skilled, knowledgeable professionals behind the curtain who manage your portfolio’s makeup. (That’s why we call them “managed portfolios.”) If you'd like to consider investing in a robo-advisor managed portfolio, TD Ameritrade Investment Management, LLC, offers Essential Portfolios, which are robo-advised model portfolios. Here’s the process for getting started.

Step 1: You tell us about yourself.

Answer a series of questions about your investing style, your risk tolerance, your time horizon, and your goals—whether you’re saving for retirement, a new home, or something else.

Step 2: Your portfolio comes together.

TD Ameritrade Investment Management recommends a model portfolio that aligns with your goals. The portfolios are composed of exchange-traded funds (ETFs) that have been recommended by the pros at Morningstar Investment Management, LLC.

Step 3: The robo-advisor goes to work.

Our robo-advisor—backed by investing professionals at TD Ameritrade Investment Management—provides the monitoring and automatic rebalancing to help keep your portfolio on track, so you don't have to.

Step 4: You stay engaged.

You can check in on your portfolio as much, or as little, as you want. With the Portfolios App, you can track your progress, deposit/transfer funds, and keep tabs on your money on the go. (But don’t worry, we’ll be monitoring it too.)

Why go automatic?

From the low fees to the low investment minimums and the professional portfolio management, there are many reasons to consider a robo-advisor model portfolio. The convenience of model portfolios can give you additional time to focus on the things that matter most: your family, your career, and all the things that make you smile.

Here are some other reasons to consider going robo:

Initial investments can be as low as $5,000.
images/gallery/icons/Piggy Bank.png
Robo-advisors cost an estimated 70% less in fees and commissions than more traditional advisors.*
The funds in your portfolio are carefully selected by experienced professionals.
You could get a portfolio recommendation in 15 minutes or less.
Your portfolio is automatically rebalanced to help you stay on track.
Your portfolio is designed to be diversified to help manage risk.

*according to Accenture

Which level of automation is right for you?

TD Ameritrade Investment Management offers three types of managed portfolios for you to consider:

Essential Portfolios


  • Fully automated
  • Low cost, low minimum
  • Choose from Core or Socially Aware model portfolios

Selective Portfolios

Robo + Human

  • Broader range of model portfolios
  • Include mutual funds and ETFs

Personalized Portfolios

Personalized Service

  • Highest level of personal service
  • Tailored advice and portfolio construction
  • Consider your overall financial picture

Key Takeaways

  • Consider a few questions to determine your investment advisor preference: traditional, or robo-advisor
  • Learn how so-called robo advisors work and their potential benefits

Related Videos

Call Us

Content intended for educational/informational purposes only. Not investment advice, or a recommendation of any security, strategy, or account type.

Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.

Before investing carefully consider the underlying funds’ objectives, risks, charges, and expenses. For a prospectus containing this and other important information about each fund, contact us at 888-310-7921. Please read the prospectus carefully before investing.

All investments involve risk, including loss of principal. Past performance does not guarantee future results. There is no assurance that the investment process will consistently lead to successful investing. Asset allocation and diversification do not eliminate the risk of experiencing investment losses.

Mutual funds are subject to market, exchange rate, political, credit, interest rate and prepayment risks, which vary depending on the type of mutual fund.

ETFs can entail risks similar to direct stock ownership, including market, sector, or industry risks. Some ETFs may involve international risk, currency risk, commodity risk, and interest rate risk. Trading prices may not reflect the net asset value of the underlying securities.

Advisory services are provided by TD Ameritrade Investment Management, LLC ("TD&nsbp;Ameritrade Investment Management"), a registered investment advisor. Brokerage services provided by TD Ameritrade, Inc. TD Ameritrade Investment Management provides discretionary advisory services for a fee. Risks applicable to any portfolio are those associated with its underlying securities. For more information, please see the Disclosure Brochure (Form ADV Part 2A).

Morningstar Investment Management LLC is a registered investment adviser and subsidiary of Morningstar, Inc. Morningstar Investment Management LLC provides consulting services to TD Ameritrade Investment Management LLC (“TD Ameritrade Investment Management”) by providing recommendations to TD Ameritrade Investment Management regarding asset allocation targets and selection of securities; however, TD Ameritrade Investment Management retains the discretion to accept, modify, or reject Morningstar Investment Management LLC’s recommendations. Morningstar Investment Management LLC selects securities from the universe of investments made available through TD Ameritrade. In performing its services, Morningstar Investment Management LLC may engage the services of its affiliate, Morningstar Investment Services LLC, a registered investment adviser and subsidiary of Morningstar Investment Management LLC. Neither Morningstar Investment Management LLC nor Morningstar Investment Services is acting in the capacity of advisor to TD Ameritrade Investment Management’s clients. Asset Allocation target allocations are subject to change without notice. Morningstar Investment Management LLC establishes the allocations using its proprietary asset classifications. If alternative classification methods are used, the allocations may not meet the asset allocation targets. The Morningstar name and logo are registered marks of Morningstar, Inc. Morningstar Investment Management LLC is not affiliated with TD Ameritrade Investment Management or TD Ameritrade.

For Selective and Essential Portfolios, TD Ameritrade Investment Management will assess an annual advisory fee based on the value of assets in your TD Ameritrade Investing Account. The fee will be assessed at the beginning of each quarter in advance for that quarter and will be prorated for accounts opened and closed during that quarter. For Personalized Portfolios, your annual advisory fee is based on a percentage of the value of assets in your TD Ameritrade Investing Account that are allocated for your Personalized Portfolio. Our fee is calculated monthly, applied in arrears, and deducted from your account. It is determined by the average daily balance of assets under management in your account and is charged in the following month. TD Ameritrade, Inc. will not charge commissions for eligible securities trades placed in your TD Ameritrade Investing Account. All fees are subject to change.

The minimum initial investment:

  • Essential Portfolios is $5,000 (minimum investment amount for corporate/business accounts is $100,000)
  • Selective Portfolios is $25,000 (minimum investment amount for corporate/business accounts is $100,000); and
  • Personalized Portfolios is $250,000 for a portfolio, consisting of one or more individual accounts, each having at least a $50,000 minimum.
If the market value of your account falls below the minimum due to your withdrawal of assets from the account, TD Ameritrade Investment Management may require you to deposit additional money to bring the account up to the required minimum. TD Ameritrade Investment Management reserves the right to discontinue its advisory relationship with you and transfer the securities to a like-titled brokerage account with TD Ameritrade. See the Disclosure Brochure (Form ADV Part 2A) for additional information.


Market volatility, volume, and system availability may delay account access and trade executions.

Past performance of a security or strategy does not guarantee future results or success.

Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.

Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request.

This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.

TD Ameritrade, Inc., member FINRA/SIPC, and a subsidiary of TD Ameritrade Holding Corporation. TD Ameritrade Holding Corporation is a wholly owned subsidiary of the Charles Schwab Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2020 Charles Schwab & Co., Inc. Member SIPC.

Scroll to Top