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Backend Benchmarking: Fidelity Go Remains Top Overall Robo Advisor

The 12th edition of the "Robo Report" also reports that Vanguard and SigFig scored highly on overall performance among 18 analyzed robo advisor providers.

Fidelity Go was the best overall robo advisor available for investors, according to Backend Benchmarking’s 12th “Robo Report." The analysis includes a ranking of robos utilizing a variety of criteria, and Fidelity’s robo platform achieved the top spot for the second consecutive time. It was also judged to be the best robo for performance at an affordable cost, as well as the best robo available from an incumbent financial institution.

“Portfolio performance, low costs and a strong digital planning platform have propelled them to our top spot,” the report reads. “While the 0.35% management fee for their digital-only service is slightly higher than many of their competitors, the underlying Fidelity Flex mutual funds carry 0.00% expense ratios, making the all-in cost at Fidelity in line with low-cost alternatives.”

The ranking grades robos on 45 separate metrics and numerous high-level categories, including customer experience, financial planning, access to live advisors, and transparency and conflicts of interest. Backend Benchmarking’s rankings applies a self-developed process of “normalized benchmarking” to judging automated investing platforms to compare portfolios that may have different equity and fixed income allocations.

Vanguard placed second to Fidelity as the best overall robo, with the report noting the platform’s ability to offer customized advice with a competitive price (though it noted the robo had a higher account minimum than many other options at $50,000). SigFig placed directly behind, a flip of Backend’s Winter 2019 rankings. The provider offers one of the most affordable options for clients, with the first $10,000 in assets managed at no cost. However, the report noted that while the platform offers a retirement planner, there are no tools tailored to other specific needs. In contrast, FutureAdvisor received the lowest marks of the 18 analyzed providers, due mainly to low marks on performance compared to the top platforms (though FutureAdvisor did get higher marks on access to live advisors than Fidelity).

The report noted it had been a busy period for the automated advisory space, noting that Schwab’s hybrid platform with subscription pricing attracting $1 billion in the past quarter, with nearly four in ten clients new to the firm (Merill Lynch also noted they may switch to subscription pricing for their hybrid robo provider, according to the report). The report also found promising signs for several socially responsible investing (SRI) portfolios; the SRI equity portfolios at Morgan Stanley and Wealthsimple both outperformed the non-SRI options by more than 2% year-to-date. Additionally, the portfoios offered more returns than their non-SRI counterparts when measured over a one-year period, according to the report.

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TAGS: Industry
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