(Forbes) -- Fidelity Go took top ranking as the best overall robo advisor in the 2019 winter edition of The Robo Ranking report from Backend Benchmarking. SigFig came in second.
This was Fidelity's first time in The Robo Ranking, the first and only report on the performance and portfolios of leading robo advisors. The report ranks robo advisors on a set of qualitative and quantitative measures. Ellevest and TD Ameritrade were also added this year.
They join the 10 providers from the last edition: Acorns, Betterment, E*Trade, FutureAdvisor, Intelligent Portfolios/Intelligent Advisory, Personal Capital, Schwab, SigFig, Vanguard, Wealthfront, and WiseBanyon.
A robo advisor is a web-based platform where the client inputs his financial data and risk tolerance levels.
Through a series of proprietary algorithms, the robo-advisor creates a portfolio that tells the client how to allocate resources.
Typically, the fee is less than that charged by a human advisor.
Fidelity’s strong performance against the report's Normalized Benchmark brought them to the top spot. The report said Fidelity's proprietary "funds carry no expense ratio, making their 0.35% management fee the full cost of the service."
"Although 0.35% is a higher management fee than some of the other robos, when considering combined management fees and expense ratios, Fidelity Go is on par with other low-cost providers," said the report.
Fidelity also scored with quality financial planning tools and an easy-to-use website with many features. However, one feature common among robo advisors that Fidelity doesn’t offer is automated tax-loss harvesting. Fidelity provides support representatives to help users with a website problem, but these are not advisors.
"Overall, Fidelity's platform and performance are strong and they are a great choice for those seeking a low-cost, low-minimum strongly performing robo advisor." said the report.
SigFig took second place because of its simple interface and the fact that clients with $10,000 in assets have access to a live advisor. It only requires a $2,000 minimum and charges a 0.25% fee on managed assets more than $10,000.
This is the second Robo Ranking. It grades robo advisors on 45 specific metrics over the time period of Dec. 31, 2016 to Dec. 31, 2018.
The final score is made up of a qualitative review of their services, platform, company, and features, as well as a quantitative score based primarily on the costs and performance of the portfolio. A small portion of the quantitative score is based on the size and tenure of the robo advice product.
The qualitative score was based on six main criteria: account minimums, financial planning, product features, access to live advisors, user interface/customer experience; and transparency and conflicts of interest.
Robo advisors that provide greater transparency and functionality to users within their base product were given the highest scores.
In this edition, weighted average expense ratios and management fees were a single metric instead of two separate ones. It also included a 0.30% management fee in the benchmark to better reflect the performance of a managed portfolio.
Backend Benchmarking is a research company bringing transparency to the financial advice industry. It's based in Martinsville, N.J. It was founded in 2017 by Ken Shapiro, the president of Condor Capital Management, which started publishing The Robo Report in 2016.
Subcategory winners include:
Best Robo for Performance at a Low Cost
Winner: Fidelity Go
Runner-Up: SigFig
Honorable Mention: WiseBanyan
Best Robo for Complex Financial Planning Needs
Winner: Personal Capital
Runner-Up: Vanguard
Best Robo for Digital Financial Planning
Winner: Wealthfront
Runner-Up: Personal Capital
Honorable Mention: Betterment
Best Robo for First-Time Investors
Winner: Betterment
Runner-Up: Acorns
Best Robo from an Incumbent Financial Institution
Winner: Fidelity Go
Runner-Up: Vanguard
