Robo-Advisor Performance: How These Tools Really Stack Up
When you hear robo-advisor performance, automated investment platforms that manage your portfolio with algorithms, often at lower fees than human advisors. Also known as automated investment services, these tools are meant to take the guesswork out of investing—but not all of them deliver the same results. Some make you money. Others just make you feel like you’re doing something right while quietly eating your returns with fees or weak tax strategies.
Take tax-loss harvesting, a strategy that sells losing investments to offset capital gains taxes. Also known as tax harvesting, it’s one of the biggest value-adds you can get from a robo-advisor. But here’s the catch: Betterment and Wealthfront use different thresholds to trigger it. Schwab’s version might not activate until you’ve lost $2,000 in a single asset. That’s not helpful if you’re investing $10,000 a year. Meanwhile, some platforms harvest losses weekly. That’s where real savings happen—hundreds, sometimes thousands, in taxes over time.
And it’s not just about taxes. Betterment, a popular robo-advisor known for its tax-efficient rebalancing and goal-based planning. Also known as digital wealth manager, it’s built for people who want hands-off growth doesn’t just buy ETFs—it manages when to buy them, how to shift assets during market swings, and when to hold cash. Wealthfront, another top robo-advisor that focuses on direct indexing and low-cost ETFs. Also known as algorithmic investing platform, it’s designed for larger portfolios offers something Betterment doesn’t: direct indexing for accounts over $100,000. That means you own individual stocks instead of ETFs, giving you more control over tax timing. Schwab’s version? It’s simpler, cheaper, but less aggressive with tax moves.
Performance isn’t just about returns. It’s about what happens when the market drops. Do they rebalance fast? Do they re-invest dividends automatically? Do they even know you’re in a taxable account? Most robo-advisors treat everyone the same. The good ones adjust for your tax bracket, your goals, and your risk tolerance. And if you’re not comparing them side by side, you’re leaving money on the table.
You’ll find posts here that break down exactly how each platform handles tax-loss harvesting, what their minimums are, which ones charge extra for advanced features, and which ones quietly underperform because they use outdated rebalancing rules. No fluff. No marketing speak. Just real numbers, real trade-offs, and what actually moves the needle for your portfolio. Whether you’re just starting out or you’ve got $50,000 sitting in an automated account, you need to know which robo-advisor is working for you—and which one is just along for the ride.
