Robo-Advisors vs. DIY Investing

6 min readUpdated regularly

Automated portfolios trade a small fee for time saved and behavioral discipline.

Our verdict

Robo-advisors suit hands-off investors; DIY suits those who'll actually rebalance

A robo-advisor's management fee is only worth paying if it replaces work you wouldn't otherwise do consistently — rebalancing, tax-loss harvesting, and staying invested through volatility.

What a robo-advisor actually does

Robo-advisors build a diversified portfolio from your risk tolerance and goals, then automatically rebalance it over time and, on some platforms, perform tax-loss harvesting. The management fee, typically a fraction of a percent annually, pays for that automation.

Partner offer

Compare robo-advisors

Affiliate placeholder — connect your robo-advisor partner link here.

View offer

What DIY investing saves and costs

Building your own portfolio of low-cost index funds can eliminate the advisory fee entirely, but only pays off if you actually maintain it — rebalancing periodically and, critically, not reacting emotionally during market downturns. The behavioral discipline is the harder part to DIY than the technical part.

A reasonable way to decide

Be honest about whether you'll actually log in and rebalance on a schedule, or whether a portfolio you set up once will just sit unbalanced for years. If it's the latter, the small robo-advisor fee is likely worth it.

This guide is for general information and doesn't constitute financial advice. Product terms change — confirm current rates and fees directly with the provider before applying. See our advertiser disclosure.