The latest breakdown of the industry's top performing robo-advisors has arrived, and the new winners look a lot like the old winners.
The10th edition of the Robo Ranking, published this week byCondor Capital Wealth Management, once again gives top honors to SoFi, Wealthfront and Fidelity Investments for the depth of their offerings and for their solid long-term performance.
If that top three sounds familiar, that is because they're the same robos that dominated the ranking in the prioredition. Wealthfront and SoFi swapped spots at the top, but things change more significantly as soon as the analysis moves beyond bronze, silver and gold.
(Scroll down to see a list of the latest rankings)
According to the report, 2022 was dominated by the economic aftershocks of the COVID-19 pandemic. Government spending, household savings and pent-up demand faced off with disrupted supply chains to ignite inflation in 2021.
"Waking up late to reality, in 2022, the Federal Reserve lurched into action, embarking on a historic rate-rising campaign," the report said. "The rapid rise in rates drove current values of future cash flows downwards, decimating valuations of low profit, high growth companies and driving asset prices of value companies lower.
"Thankfully," the report added, "inflation has, at last, shown signs of easing, and the Fed appears to be approaching the end of its rate hiking cycle. Bonds are delivering truly attractive yields for the first time in many years, and equity markets have risen from their lows, reflecting investors' optimism for 2023."
Importantly, the report said that the pace of change in the robo-advisor market has slowed as most major banks, discount brokers, and wirehouses have launched a digital advice or hybrid advice offering.
Wealthfront topped the list and was praised for delivering "a top-tier digital experience." SoFi came in at a very close number two by offering more products and access to human advisors.
"The digital experience offered by Wealthfront is top-tier and strikes an impressive balance between simplicity, functionality, and customization," David Goldstone, the manager of investment research at Condor Capital Wealth Management, in Martinsville, New Jersey. "Wealthfront has had a strong platform that has been a leader in innovation since its founding over a decade ago.
He noted that SoFi has greatly expanded the types of financial products it offers over the past few years "as it ambitiously looks to compete with national banks for retail investing and banking business. All SoFi members get free access to live financial planning services, which is one reason we like the investing platform."
The biggest robo news of 2022 was the collapse of themassive $1.4 billion UBS and Wealthfront dealfor reasons still unacknowledged by both companies, according to the report.
"When the merger between Wealthfront and UBS was announced, it was unclear what that would mean for the existing robo-advice product, Advice Advantage, which is backed by SigFig," the report said. "Regardless, Wealthfront will remain independent for the time being after the tie-up was abandoned last year."
Other major robo happenings in 2022 included arecently downsized Bettermentannouncing its transition to a subscription-based monthly fee of $4 for those with less than $20,000 platform assets or without monthly recurring deposits of $250; and Vanguard working to incrementally improve its platform with the expansion of automated tax loss harvesting for its digital-only product Digital Advisor.
The Condor Capital ranking grades robo-advisors across more than 45 metrics. Each robo is then scored in the categories of features; financial planning; customer experience; access to live advisors; transparency and conflicts of interest; size and tenure; account minimums; costs; and performance to earn a total score out of 100.
The ranking was part of the26th Robo Report, which covers the fourth quarter of 2022 in an ongoing study that keeps tabs on the most well-known robo-advisors in the industry. The latest report tracks 57 accounts at 32 different providers and finds 2022 will go down as one of the worst periods for the 60/40 investor.
"The year serves as a unique stress test of what can happen to investment returns when the Federal Reserve increases the Federal Funds' target rate from near-zero levels to over 4% in a single calendar year," the report said.
source：financial-planning
Comments