Robo-Advisors: What the Fee Buys
You are paying for maintenance and for not touching it. For some people that is excellent value.
At a glance
Figures checked 1 Sep 2026
Expense ratio
0.25% platform fee plus around 0.05% in underlying funds
Minimum investment
Often $0 to $500
Risk level
Set by your questionnaire answers
What to take away
- The fee covers allocation, automatic rebalancing and sometimes tax-loss harvesting.
- A single target-date fund does most of the same work for less.
- The real value is behavioural — an automated portfolio is harder to meddle with.
A robo-advisor assigns a diversified ETF portfolio based on a risk questionnaire, then rebalances it and reinvests dividends automatically. Fees are typically a quarter of a percent on top of the underlying funds.
Where it is worth it
- You will not rebalance yourself, and you know it.
- You have a taxable account large enough for automated tax-loss harvesting to be meaningful.
- You want a single interface across goals and accounts.
Where it is not
If you are comfortable holding a three-fund portfolio or a target-date fund and rebalancing once a year, the platform fee buys convenience you already have.
Common questions
On $250,000 it is $625 a year, every year, rising with the balance. Compare that against the specific tasks it performs for you.