Interactive Advisors review: Automate your investing with as little as $100
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- Interactive Advisors is an Interactive Brokers-affiliated automated investing platform.
- You can get started with as little as $100, but fees can range from 0.08% to 1.5%.
- It offers managed portfolios, socially responsible options, smart beta portfolios, and more.
- Click here to set up an account with Interactive Advisors.
Is Interactive Advisors right for you?
Interactive Advisors is an automated investing platform serving US-based investors that's affiliated with online brokerage platform Interactive Brokers.
It offers a range of portfolio options, and it lets you automatically mirror the same trades its professional portfolio managers make in their accounts.
With as little as $100, you can automate multiple account types, including IRAs and individual, joint, and trust accounts.
Not sure if Interactive Advisors is right for you? Keep reading to see how it stacks up against other automated investment brokers.
How does Interactive Advisors compare?
Interactive Advisors, Betterment, and M1 Finance all have investing options for hands-off investors who prefer automated portfolio management. You'll mainly notice differences in fee structures, investments, and account perks.
Interactive Advisors and M1 Finance are more ideal for those who like having both automated portfolio options and the flexibility to choose their investments or portfolios.
Betterment, however, may be a better choice for those strictly in search of low-cost, automated portfolio management, with access to individual and joint accounts, trust accounts, IRAs, and human advisors.
Ways to invest with Interactive Advisors
Automated portfolio management
Some automated investing accounts like Betterment and Ally Invest Managed Portfolios only create a customized portfolio for you after you've answered a series of questions about your investment preferences.
Interactive Advisors, on the other hand, gives you two options: Fill out a questionnaire to receive a personalized portfolio or choose one of the 60 portfolios it offers. The company's interface makes it simple to filter through different portfolios.
The platform also offers multiple investing options. These include:
- Asset allocation portfolios : Interactive Advisors' asset allocation portfolios invest your funds in a diversified blend of ETFs. This option includes a 0.12% asset-based fee.
- Actively managed portfolios : Portfolio management mainly falls into the hands of Interactive Advisors' CIO and investment team, but the company also relies on registered investment advisors (RIAs) and data from top investment management companies. These portfolios utilize a wide range of ETFs and can have minimums as high as $50,000.
- Smart Beta portfolios : Interactive Advisors says these portfolios aim to achieve more attractive returns through an alternative risk-return profile. These portfolios also include fractional shares and automatic rebalancing.
- Socially responsible portfolios : You can invest in companies that work to positively impact the world and embody other ESG factors.
When you invest in an actively managed portfolio, Interactive Advisors says it buys that portfolio's securities and places them in your brokerage account. In addition, whenever the portfolio manager executes a trade, Interactive Advisors makes the same trade for you.
Interactive Advisors supports individual accounts, joint accounts, and IRAs. You can also upgrade your account into a self-directed brokerage account at any time.
Interactive Advisors mainly uses ETFs and other funds when building portfolios. Its asset allocation portfolios utilize the following components:
- Equity: This gives investors exposure to US stocks and developed market and emerging market stocks (funds used include VTI, DVY, VO, VB, VEA, and VWO).
- Bond: Interactive Advisors uses several ETFs for bond exposure. Funds used in this component include BND, LQD, HYG, TFI, TIPS, and BNDX.
- Inflation-hedging: The platform's asset allocation portfolios also invest your money in real estate and commodities to protect you against inflation. Funds it uses include VDE, VNQ, and inflation-protected bonds (TIPs).
Furthermore, Interactive Advisors' other three portfolio options — Smart Beta, socially responsible, and actively managed — also utilize a range of ETFs. Its asset allocation portfolios have a $100 minimum and 0.12% advisory fee. You can learn more here.
Is Interactive Advisors trustworthy?
Personal Finance Insider measures trustworthiness by reviewing each company's Better Business Bureau profile. Interactive Advisors doesn't currently have a BBB profile.
However, both Interactive Advisors and Interactive Brokers LLC are part of Interactive Brokers Group. Since all Interactive Advisors clients must hold accounts with Interactive Brokers, it's worth noting that Interactive Brokers currently has an A+ rating with the Better Business Bureau.
Nonetheless, always make sure to do your own due diligence, as the bureau says its ratings don't guarantee a company's reliability or performance.
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