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Condor Capital Wealth Management
Q3 2024

The Robo Ranking

Highlights

  • Fidelity Go wins Best Overall Robo, offering stellar performance, competitive fees, no minimum investment, and robust features.
  • The winners of Best Robo for Digital Financial Planning, Empower and Wealthfront, serve as an example of simple yet effective online planning.
  • SoFi won Best Robo for First-Time Investors because of its low fees, and its ability to manage many areas of one’s financial life on a single platform including debt consolidation, career coaching, and live financial planning.

Best Overall Robo Advisor

  • Winner: Fidelity Go
  • Runner up: Merrill Guided Investing

Fidelity Go is our winner for Best Overall Robo in this year’s Robo Ranking Summer Edition. Fidelity Go stands out for its competitive fees and robust features. The platform charges a management fee of just 0.35%, with no minimum investment requirement at the base level and $25,000 for accessing live advisors. This cost efficiency makes it an attractive option for investors seeking a low-cost robo advisor. Fidelity Go also offers access to live operational support and licensed advisors (series 66 or 65), providing significant advantages to users. While Certified Financial Planners (CFPs) and dedicated advisors are not available at the base tier, the platform excels in financial planning, offering tools to build single and multi-goal financial plans, model various “what-if” scenarios, and determine retirement spending needs. The inclusion of Social Security estimates and the ability to incorporate pension income further enhance its comprehensive approach to retirement planning. Additionally, Fidelity Go delivers a superior customer experience with educational materials, a fully integrated digital advice portal, a mobile app, chat support, and account aggregation for a holistic financial picture.

Fidelity Go achieved exceptional performance scores, making it one of the top performers in our tracked universe. The platform’s significant allocation to municipal bonds and its positioning with a bias towards large caps have contributed to its strong returns relative to benchmarks and good risk-adjusted performance. The lack of a cash allocation ensures that the portfolio is fully invested, maximizing potential returns. Over the trailing 3-year period, Fidelity Go’s portfolio managed to outperform its normalized benchmark by 0.75%, showcasing its effective investment strategy. Despite the challenges faced by equities and fixed income in 2022, Fidelity Go’s strategic asset allocation mitigated the effects of the broader market sell-off, resulting in solid performance. Overall, Fidelity Go is an excellent choice for investors, offering a blend of low fees, robust financial planning tools, strong performance, and a user-friendly experience.

Merrill Guided Investing is our Runner-up for Best Overall Robo in this year’s Robo Ranking Summer Edition. Merrill offers two tiers of service, a digital only tier, Merrill Edge Guided investing, available to those with $1,000 or more to invest, and a hybrid tier, Merrill Edge Guided Investing with an Advisor, available to those with $20,000 or more to invest. It is fairly standard in its offerings at the base tier, with access to live operational support, an ESG themed investment portfolio option, and a single goal per account planning tool that can help you project your future account value and likelihood of achieving your goal. At the hybrid level, investors will get access to live advisors to help with more complex planning.

Performance was another driver of their ranking, with Merrill scoring in the top half of our tracked universe thanks in part to its relatively large allocation to municipal bonds on the fixed income side of the portfolio, as well as its bias towards large caps on the equity side. Over the trailing 3- and 5-year periods, the Russell 1000 Index has returned 8.73% and 14.57% annually on average versus returns of -2.62% and 6.90% for the Russell 2000 Index. Merrill is one of the more active portfolio managers and is a good choice for those seeking a more active approach to portfolio construction.

Best Robo for Performance at a Low Cost

  • Winner: Fidelity Go
  • Runner-up: Wealthfront

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Performance Commentary

Highlights Portfolios with higher allocations to domestic, large-cap, and growth equities significantly outperformed their peers over the past year. A strategic focus on domestic large-cap equities and municipal bonds drove superior performance over the past three years. Strong U.S. market performance led portfolios emphasizing domestic large-cap equities to consistently outperform over the past seven years. […]

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Disclosures

In previous reports, the initial target asset allocation was calculated as the asset allocation at the end of the first month after the account was opened. In the Q3 2018 report, we adjusted our method to calculate the initial target asset allocation as of the end of the trading day after all initial trades were placed in the accounts. This adjustment has caused some portfolio’s initial target allocation to be updated from previous reports. These updates did not change any initial target allocations of equity, fixed income, cash, or other by more than 1%.

Prior to Q3 2018, due to technological limitations of our portfolio management system, some accounts which contained fractional shares had misstated the quantity of shares when transactions quantities were smaller than 1/1000th of a share in a position as a result of purchases, sales, or dividend reinvestments. This had a marginal effect on the historical performance of the accounts. The rounding of position quantities caused by this limitation has been resolved, and quantities have been adjusted to reflect the full position to the 1/1,000,000th of a share as of the end of Q3 2018. Therefore, this rounding of fractional shares will not be necessary in the future.

At certain custodians, a combination of the custodian providing us a limited number of digits on fractional share and fractional cent transactions rounding errors are introduced into our tracking. At quarter-end starting 3/31/2020, we implemented a process to enter small transactions to eliminate any rounding errors that have built up to more than a full cent. These transactions are small and do not have an appreciable effect on performance. Sharpe ratios and Standard Deviation calculations are calculated with the assumption of 252 trading days in a year.

This report represents Condor Capital Wealth Management’s research, analysis and opinion only; the period tested was short in duration and may not provide a meaningful analysis; and, there can be no assurance that the performance trend demonstrated by Robos vs indices during the short period will continue. A copy of Condor’s Disclosure Brochure is available at www.condorcapital.com. Condor Capital holds a position in Schwab in one of the strategies used in many of their discretionary accounts. As of 12/31/2024, the total size of the position was 64,818 shares of Schwab common stock. As of 12/31/2024, accounts discretionarily managed by Condor Capital Management held bonds issued by the following companies: Morgan Stanley, Bank of America, Wells Fargo, E*Trade, Citi Group, Citizens Financial Group, Ally Financial, Charles Schwab, Fidelity, and TD Bank.