Best Robo-Advisor for High Net Worth Individuals

Has the time of man passed? Has the robot revolution begun? A tad too dramatic, but there still might be some merit to it. 🤖

Due to the pandemic-induced craze, option trading has gotten to its most competitive level and any help is welcome for a lot of people.

Robo-advisors have become more in demand over the years, gradually making the world of investing increasingly automated with a need for less and less human intervention. From financial advice to mathematical algorithms, robo-advisors do it all.

But not all robo-advisors are the same. They don’t all offer a uniformed set of services, provide a set standard, or target the same investors, although they were traditionally aimed more towards younger or more passive investors looking to take a back seat on their journey towards financial freedom.

As robo-advisors become more advanced, so do their services, allowing them to target investors with specific goals, needs, skills, or investment budgets. This means that some robo-advisors are best for smaller investors, some for more passive investors, and others for high-net-worth investors. If you are a high-net-worth investor looking to discover the advisor to help you reach your financial goals, then you’ve come to the right place.

In this article, we are going to:

• ☑️ Highlight the best robo-advisors for high-net-worth investors
• ☑️ Discuss our top pick in more detail
• ☑️ Help you easily discover the advisor for you

Top 5 Robo Advisors for High Net Worth Investors 📚

In this section we’re going to lay-out some key information on advisors we believe will benefit high-net-worth investors the most. After this, we’re going to discuss Personal Capital in a lot more detail to help you discover if it could be the one to help you reach your financial goals.

But don’t skip there just yet. Each of the advisors mentioned below have something unique to offer and could have just what you need. Take a look.

1. Empower

Empower is our top pick for high-net-worth investors looking to maximise returns. The firm is relatively new after being founded in only 2009, but has gained increased traction with wealthy investors over the years. The platform has become so popular, and profitable, that it was bought for $1 billion by Empower Retirement in July of 2020.

Empower aims its services purely towards really high-net-worth investors with a minimum requirement of $100,000. While there is no account opening or termination fee, clients are charged a management fee of between 0.49 to 0.89% depending on your account balance.

With research being a key component for successful traders, quality research tools can be difficult to access. This platform offers investors analysis tools that enable you to perform some of the most in depth analysis on the market. These tools include, fee analyzers, simulators, technical calculators, and retirement planning tools, to name a few.

The firm’s tax-loss harvesting strategy is a highlight, as well as the two dedicated financial advisors that are provided on request to help you through a number of potential issues that may pop up on your journey including, tax management, estate planning, remortgaging, not to mention, retirement planning.

Empower’s robo-advisor should help guide investors looking to have full control over their investment portfolio towards increased returns, with their advanced analysis tools and dedicated financial advisors. As mentioned, to help you decide if Empower is the right broker for you we’ve written a more detailed review further below. Before that, let’s look at which other robo-advisors make the list.

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2. Vanguard Personal Advisor Services

Vanguard has remained a leader in low-cost mutual fund investment options over the years. The firm began offering a personal robo advisor service to clients a couple of years ago to give investors more control over their decisions.

Investors can access Vanguard’s Personal Advisor Services (PAS) with a minimum requirement of $50,000. While this requirement is about half the amount of Personal Capital, yet a clear target for high net-worth investors none-the-less.

Vanguard PAS features regressive account management fees that decrease from 0.30% to 0.05% the more your account balance increases. As a high-net-worth investor, you’re bound to face some additional complexity in your financial life. Thus, a significant benefit of PAS is the added bonus of a dedicated human financial advisor that you can turn to when needed.

This service creates personalized portfolios based on your particular experience, goals, and risk preference. Its online experience helps you understand your progress toward your goals and how changes could impact it — as well as keeping you informed of market and economic trends. Our in-depth Vanguard PAS review provides more information on the pros and cons of this popular hybrid robo-advisor.

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3. Wealthsimple

Another quality robo-advisor option for high-net-worth investors is Wealthsimple. This is an easy-to use platform for more hands off investors.

High-net-investors can invest an initial deposit of $100,000 to activate the Wealthsimple Black service which offers traders a lower management fee of 0.4% compared to 0.5% on the basic account, in addition to some extra features.

Wealthsimple customers won’t be charged any transfer, trading or tax-loss fees. The best part, this robo-advisor works to make your journey as time efficient as possible by providing automatic rebalancing, automatic deposits, and dividend reinvestment.

Another Wealthsimple highlight is its halal, or values-based investing, which means you can invest in more eco-conscious companies and/or more socially-responsible endeavors with a focus on sustainability and having a positive social impact.

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4. Betterment

Another robo-advisor that should be a consideration for more hands-off investors looking to invest $100,000 or more is Betterment.

The Betterment Premium service does require an initial deposit of $100,000 and you will receive a 0.40% management charge.

Although fees are above average here there is no trading or transfer fees and you will get automatic rebalancing, access to Betterment’s professionals at any stage throughout your time there, and some personalized advice.

Tax-loss harvesting is also a key service offered by Betterment for balances of $50,000 or over. This makes costs far more efficient for taxable accounts. For more on this and other Betterment services, you can consult our Betterment review.

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5. Wealthfront

Wealthfront offers a transparent and clear fee structure. Every account is charged the same 0.25% fee regardless of your account type or balance. Investors looking to deposit more than $100,000 won’t find a better account management fee out there.

Wealthfront robo-advisor offers tax-loss harvesting for all accounts, but the real icing on the cake is that investors with over $100,000 in their account can activate Risk Parity which provides a more intelligent risk balancing service.

Those investing $500,00 or over can access Smart Beta, a service aiming to increase returns by weighting securities in the US stock index more intelligently.

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A Short Guide to Investing for High-Net-Worth Individuals 🧠

Now that we have listed out the best services let’s go a step further and analyze the details that the services provide.

What Qualifies You as High Net Worth? 💭

A high-net-worth investor (HNWI) is typically someone with $1 million or more in cash or assets. High-net-worth individuals are usually offered exclusive services by financial institutions.

Is a Robo Advisor Worth Signing up To? 🤔

Robo-advisors offer automated solutions to time consuming, or more complex tasks and generally, in a low cost way.

Robo-advisor fees are typically lower than those of financial advisors, although the worth of the services depends on your needs and goals.

Is a Robo-Advisor a Good Investment? 💡

As robo-advisors become increasingly advanced they are able to cater to a wider range of traders. Traditionally, robo-advisors were the best option for newer and younger investors due to their low fees. However, now firms are creating hybrid-advisors that essentially combine robo-advisor features with some human advisor features. Although this does increase the costs overall, it offers a more exclusive service, and one that appeals to many high-net-worth individuals.

How Much Money Can Robo Advisors Help You Make? 💲

Similar to how fees are charged for financial advisors, fees with robo-advisors are charged as a percentage of your assets with the robo-advisor. For example, an account with $10,000 could pay as low as $25 per year. This fee is usually taken from your account, prorated, and charged on a per month or per quarter basis.

What to Look Out For in a Robo-Advisor? 🔍

This will depend on your personal needs and goals but generally you will need to take into account the services and support that the robo-advisor offers, the level of human interaction provided, the minimum balance required, in addition to the fees charged.

In the next section, we’re going to take a look at each of these factors in our top pick for robo-advisors for high-net-worth clients, Personal Capital.

Why Personal Capital is Our Top Pick For High-Net-Worth-Clients 💰

Personal Capital is our top pick for the best robo-advisor for high-net-worth for many reasons that we’re about to go through now in more detail.

Personal Capital is one of the most popular fintech products out there. The company was founded in 2009 with the aim of meeting the needs of clients who wanted quick, and smart advice, without the hassle of speaking to customers, through cutting-edge technology.

Since then, it has grown and evolved into an $8 billion company in assets under management. The global rise of assets under the management of robo advisors is evident. There are whispers of the company going public but that is mere speculation right now.

Below, we’re going to discuss why Personal Capital is good for your capital, personally. We’ll go through it’s highlights, as well as it’s downfalls including, taking into account its services, products, fees and customer services.

To finish, we’ll do a run-through of the highlights, and why we think Personal Capital is the best broker for high-net-worth clients. First, we’ll start by outlining who Personal Capital is best for.

What is Personal Capital? 💸

Although we’ve given a brief outline of Personal Capital above, let’s get a little more specific.

First, a clarification is needed that although Personal Capital has placed top in our robo-advisor ‘award’, the company does not identify solely as a robo-advisor, but a digital asset management service. This is because the firm also provides a Private Client service; a personal financial advisor to clients that can be contacted as much as you need them.

That being said, Personal Capital was also one of the first to lead the way for automated elements and putting tools directly into the hands of customers. Which is why it falls into the Robo-advisor category too.

Just under two million people use Personal Capital in one of these two ways. The robo-advisor tools, collates data from your available accounts and analyses it before recommending the best options moving forward to increase returns. These tools are useful for traders at all levels, no matter your chosen bank or investments.

The company’s Asset Management Service offers an on-call private financial advisor for clients with a high account minimum of $100,000 to start. While this does have the potential to put a lot of investors outside of the company’s audience, anyone who can meet this target will reap the benefits.

Most clients do primarily use the free version, although the Wealth Management Service is growing and now has over 18,000 clients, with a combined total of $8 billion in assets under management.

More and more, clients are upgrading to the Wealth Management Service to get some well-needed assistance and guidance. The company was founded in 2009, only 11 years ago and is based in San Carlos, California.

Personal Capital is Best For 🤑

Although this article will be more focused on high-net-worth investors, if you categorize yourself as one of the following types of traders, or with the following needs, then read on. This review is applicable to you, too.

• ☑️ High-net-worth investors
• ☑️ Investors that prefer to be hands-off
• ☑️ Looking for tax optimization
• ☑️ Quality financial management tools
• ☑️ Personal financial advisor

Now listen. The sheer nature of Personal Capital is more unique than other easily categorized advisors. But, that’s not all that makes them stand out.

Their services, tools, and features are also unique in their own right and might just be perfect for your individual needs. You might even find some features you never knew you needed until now.

What Makes Personal Capital Unique 💳

Among many things and features, we decided to point these out as the most unique.

Retirement Planner 📅

This feature helps you discover if you’re on your way towards a good retirement plan. This feature is now currently available on mobile

Retirement Paycheck 🧾

Helps guide you on how to take out your retirement savings during your retirement in the most tax-friendly way.

Cash Flow Analyzer 🔬

This tool helps you budget by tracking your spending habits by week, month or year. Available on mobile, you can track your spending throughout the day to find out where you might be going wrong.

Exclude From Advice 🔖

Maybe you don’t want any investment advice, and would like to make your own decisions. The company doesn’t want to offer any unsolicited advice, and lets you choose whether or not you would like to get some.

Education Planner 📖

This is ideal for helping students figure out which colleges best suit their financial needs by comparing and contrasting fees and helping them deal with student debt.

401 Fee Analyzer 🔎

Unsure how much exactly your retirement plan is adding up to? Hidden fees can catch a lot of people off guard and really add up. The 401 Fee Analyzer breaks down the costs for you.

Investment Checkup 🗓️

Your investment might be going downhill and you might not even know it. Personal Capital will determine the health of your investment allocation by looking at the risks.

Once a diagnosis is determined, a recommendation is given for a suitable asset allocation.

Asset Allocation Target 🎯

This will help you discover whether you are over or under any major equity categories.

Upcoming Bills 🏦

Allows you to see a report of all bills due and upcoming bills

Email Summaries 📧

Receive an email that summarises your investment portfolio and spending.

Personal Capital Cash 💵

This is a cash account that pays interest of around 2.30% APY with no fees. This varies from a traditional savings account because there are no transaction limits, and no minimum balance is needed.

Free Personal Finance Software: Is it Really Free? 🆓

“The tools are free. Our advice is honest, The future of wealth management is here.” This is on Personal Capital’s main page. But, how true is it? Are the advisor’s tools completely free?

It might have said that robo advisors are the future because – Yep, totally.

While it might be difficult to believe for those skeptical of hidden charges, Personal Capital’s Finance Software is completely free.

You’ll get the standard of customer support that is expected from a robo advisor, in addition to consultations with real, human advisors, and there are plenty of tools to utilize with the free version, too. So, you won’t feel like you’re missing out if you don’t upgrade.

That means, there’s no need to pay a cent. You can go ahead and link your accounts, track and budget your spending, stay on track of your retirement plan, discover your net worth, as well as analyzing your fees.

All these first-class features will help you really get in control of your finances, and they’re all completely free ($0). Anyone eager so far can create an account now, but for everyone else, read on.

Personal Capital’s Retirement Planner 📆

Personal Capital’s Retirement Planner can help you figure out where you’re at with your retirement plan, and if you’re heading in the right direction, or not. This advanced feature enables you to create and track your spending goals and project portfolio valuations for the future. Once you’ve inserted all the information, the tool will collate it all and analyze it before telling you how everything is looking – pretty neat!

Another cool thing about this is: there aren’t many of its kind. And, its features far outshine and outnumber the ones that are similar, including the many paid tools available.

This tool is detailed, comprehensive and informative. It includes a variety of variables, and allows you to create alternative scenarios so you can see how different plans would play out.

Another thing, you don’t even need to enter any of the information manually; all the stats are automatically populated. This simple feature immediately saves time and energy.

401(k) Analyzer 🧮

The 401(k) analyzer tool works similarly to the Retirement planner tool in that expenses are derived from any accounts links to the service. After that, the tools begin making some assumptions that you can customize, and you’ll see a list of any ghost fees that may have been slowly, or quickly, gnawing into your plan.

Annual fees that add up to a lot more than you are expecting. It makes sense to keep an eye on things and pay attention to any unexpected deviations as time goes on.

Will Your Money Be Safe With Personal Capital? 🛡️

Yes, Personal Capital is safe to use and has good security features. You must register and authorize each platform before you can use it. You’ll have the option to select whether you want to verify by phone or email.

It’s a good, quick way to identify the user and keep your information safe. It would be even better if all financial institutions had this feature – We can dream. Dreams aside, Personal Capital’s security measures are a one stop job. Once you register your device you won’t need to do it again.

iOS devices that have finger recognition can use the finger scanner on Personal Capital’s app. This isn’t first-class security, we know, but it is an extra coat of protection, at the same time. Any information entered into the platform is locked in a one-way encryption token to access your account at some point in the future.

If you’re thinking about withdrawing a little from your account now and then. Think again. Personal Capital doesn’t allow you to make withdrawals or transfers. Anything you can see is from a screen only.

To finish, as long as you don’t enter your account information (highly do not recommend doing) then your account information won’t be visible.

Personal Capital’s Wealth Management Service 📞

The website is fee free, and you are never under any obligation to pay for the advisor service.

However, Personal Capital Advisors might be able to help you get where you need to go, for a price. The latest information available states that Personal Capital manages over $8.5 billion in assets. Here is a breakdown of their annual fees:

Personal Capital Commissions & Fees 🪙

A minimum of $100,000 is needed to begin using the wealth management service. As we can see, the higher the investment, the lower the fees. Which means that high-net-worth clients will benefit the most from Personal Capital.

Management Fee 💴

Personal Capital fees are determined by the value of the assets held in their account. The company offers tiered asset management. Those with $100,000 to $200,000 in assets qualify for the first tier, Investment Service.

These portfolios include ETFs and priority support services is provided. Those with $200,000 to $,00,000 qualify for the Wealth Management tier; clients receive a personal financial advisor and a more varied portfolio consisting of stocks, tax-loss harvesting, and more.

Those with a really high-net-worth of $1,000,000 or more, will really appreciate Personal Capitals Private Client. This portfolio is extremely flexible and includes individual bonds along with private equity investments.

The Private Client tier is trying to directly compete with established wealth management firms, like Edward Jones. Fees can go as low as 0.49% and average about 0.79% per year for assets under management – For assets over $10 million. High-net-worth clients would usually have to pay much higher fees than these with traditional wealth management firms.

Average advisors can cost 1% and up, a significant increase on Personal Capitals fee. Traders with $200,000 and up will have access to a dedicated advisor and more flexible, customized portfolios.

However, when Personal Capital is compared with other robo-advisors, the firm comes in with higher fees. Any clients with less than $1 million will be charged 0.89% of assets managed. This is in comparison with other robo-advisors charging fees of around 0.25%.

Even when looking at online financial advisors like Vanguard’s Personal Advisor Services, Personal Capital charges higher fees: Vanguard has fees of 0.30% (up to $5 million), though a dedicated advisor is only provided once you meet the $500,000 investment minimum.

Are Personal Capital’s Fees Worth It? 💷

Overall, Yes. Personal Capital fees are lower than traditional financial advisors. The company does not charge trade commissions and wealth management, trade costs and custody fees are all included in the annual fee.

A personal advisor is also included, whether you use the wealth management service or not. An appointment can be easily scheduled through the app and you can get assistance from your advisor as much or as little as you feel is necessary.

What features exactly are included in this service? Let’s take a quick look.

Wealth Management Features for High-Net-Worth Clients

The asset allocation deserves to be discussed in more detail. Personal Capital uses a wide variety of individual securities and ETFs to create a portfolio.

Personal Capital wants to help increase clients portfolio performance and of course, annual fees will not help this in the long run. Index funds in addition to annual fees can really bring up your costs when put on top of the management fee Personal Capital charges.

This means that index funds would decrease your returns over the year, which is why Personal Capital chooses to invest in individual stocks in a variety of funds instead.

To elaborate, individual securities will create a more tax efficient portfolio (as long as you have a taxable account, that said). Therefore, while a variety of funds will not be a complete replica of index funds, you can count that it will be almost there, and you will benefit from lower fees and taxes.

Not to mention, your taxes will be managed better with Personal Capital’s tax-loss harvesting.

Additional Personal Capital Features 🧰

Personal Capital has so many amazing features we just had to share all of them with you.

Personal Capital Mobile 📲

Personal Capital’s app is available on both iOS and Android devices. It has a clear design that customers acknowledge in their shining reviews of both the iOS and Android versions.

That said, not all features are available on the app, such as the performance statistics and the Investment Checkup. The app is probably handiest for it’s dashboard where you can see your finances on one screen – and this is most likely what you’ll be looking out for most of the time.

Personal Capital Customer Support ☎️

As we briefly mentioned above, Personal Capital provides the customer support that you’d expect from a ‘robo-advisor’. Clients can contact support by phone and email, 24 hours a day throughout the week and weekend.

The support team is helpful and informative and the phones are answered relatively quickly. This is the same for both versions of the company, although Wealth Management clients will also have access to their assigned dedicated advisor.

There’s also an FAQs section where you might find answers to more common questions, in addition to a Support Portal with sections on Getting Started, a How To, Investments, and Troubleshooting. Clients in the Wealth Management tier can contact their advisor as soon as their account is set up.

How To Create A Personal Capital Account 🗣️

You can sign up for Personal Capital through the website. You start by providing your email and phone number, then creating a password. Signing up to Personal Capital is quick and simple. Just visit the website and provide your email while creating a password.

After this, you’ll be asked some personal information including your name, age and the age you expect to retire at. Personal Capital does focus strongly on retirement planning.

Once you’ve provided the information necessary, you can begin adding accounts. Personal Capital access over 12,000 financial institutions, or alternatively, just add the name and address of your institution/s.

Firstly, Personal Capital will look at your financial accounts for the past three months and begin to analyse them. This analysis will set the foundation for Free Dashboard, and the recommendations that Personal Capital offers.

To upgrade to the Wealth Management Services you’ll need to get in touch with a financial advisor to kick start things. Or, if you wait a bit, a financial advisor will get in touch with you.

This process will require more information than the original set-up, such as documentation that confirms your identity. Then, you will be asked to link your accounts to transfer funds into your Pershing account; where your investments will be held.

In order to determine your risk tolerance, goals and timeline you’ll be asked to complete a questionnaire. On top of this, you’ll be asked to take a call with a financial advisor where you’ll hash out all the specifics.

Finally, a portfolio will be created based on all of the information gathered, including from the questionnaire and your call with the financial advisor.

Summary 🏁

Personal Capital has been chosen as the top pick for high-net-worth clients for their services, tools, security and strong features. Unfortunately, this does mean that it may not be the best option for anyone that doesn’t meet the company’s high minimum deposit.

However, anyone considering Personal Capital can check out the app to get a quick analysis of where they would fit into the three tiered structure. It might be a great option for a retirement savings account, as this is a strong focus for the company.

You can also go ahead and set up an initial call with a dedicated advisor for free which will surely give you a better picture of how Personal Capital can help you, personally.

Overall, this is an excellent platform with great feedback from its users.

All you high-net-worth investors, who are more than likely the majority here, can really benefit from Personal Capital’s managed accounts.

A quick summary of the fees charged; they are higher than typical robo-advisory fees but lower than the majority of financial advisors.

Lastly, and more importantly, Personal Capital has a structurally sounder methodology that really utilizes MPT and creates true diversification beyond a standard blend of ETFs.

If you have the money, and are looking for the best, then Personal Capital might be the right way to move forward with investing.