Editor's Note: This page may be out of date
TD Ameritrade has been acquired by Charles Schwab, and the company expects all accounts to be transitioned by the end of 2024. We've kept this page covering TD Ameritrade for historical purposes. For the most up-to-date information on Charles Schwab accounts, please see our corresponding Charles Schwab page.
Charles Schwab Review
TD Ameritrade Essential Portfolios is among the best robo-advisors for account types, portfolio selection, and customer service. While it's management fee and account minimums are on the higher end, compared to competitors, the robo-advisors makes up for this with features such as low-cost ETFs and advanced offerings, such as tax-loss harvesting. But is this robo-advisor right for you? Find out in our comprehensive TD Ameritrade Essential Portfolios review.
Ratings Methodology
TD Ameritrade Essential Portfolios
Our Rating:
Rating image, 4.5 out of 5 stars.
4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Bottom Line
TD Ameritrade Essential Portfolios has a great portfolio selection and in-person help, but its high account minimum might be too steep for some investors.
Fees:
$0 per trade, management fee 0.30%, expense ratio 0.06%-0.07%
Account Minimum:
$5,000
Alternatives to Consider
We recommend comparing brokerage options to ensure the account you're selecting is the best fit for you. To make your search easier, here's a short list of our best trading platforms of 2024.
Account | Fees | Account Minimum | |
---|---|---|---|
Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | $0 for stocks, $0 for options contracts | $0 | Open Account for SoFi Active Investing |
Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | $0 for stocks, ETFs, and options; up to $6.99 monthly for Robinhood Gold | $0 | Open Account for Robinhood |
Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | Commission-free; other fees apply | $0 | Open Account for E*TRADE |
Full TD Ameritrade Essential Portfolios review
This robo-advisor is a good fit for: Hands-off investors that want access to a diverse set of portfolio options and account types.
Pros
- Portfolio selection
- Customer service
- Low-cost ETFs
- Many account types
Cons
- Management fee
- Account minimums
Top perks
Excellent portfolio selection
TD Ameritrade Essential Portfolios offers one of the most extensive selections of portfolio options among the best robo-advisors. Investors can choose from five Socially Aware Portfolios which focus on environmentally and socially friendly companies, as well as a number of core portfolio options.
Tax-loss harvesting
This is one of the biggest differentiators of TD Ameritrade Essential Portfolios. Few other robo-advisors offer free and automatic tax-loss harvesting, and those that do generally only offer it for large accounts. Schwab Intelligent Portfolios, for instance, offers tax-loss harvesting to clients with $50,000 or more of invested assets. This can save investors hundreds of dollars in taxes.
Large branch network
If you'd rather get customer service help in person than over the phone or through email, TD Ameritrade has more than 275 branches across the United States. Few other brokers can match this physical presence. However, it's worth noting that TD Ameritrade had closed all of its branches temporarily due to the COVID-19 pandemic, but some are reopening on a local basis.
Low-cost ETFs
While TD Ameritrade's management fee isn't the lowest we've found, the low-cost ETFs it uses to construct client portfolios helps make up for it. ETFs in the core portfolios have expense ratios of just 0.06%-0.07%, and even the 0.10%-0.17% expense ratios charged for its Socially Aware Portfolios are rather cheap.
Frequent rebalancing
TD Ameritrade Essential Portfolios automatically rebalances client portfolios annually and on an as-needed basis. Some competitors only rebalance assets at predetermined intervals, such as every six months.
Customer service
You can contact TD Ameritrade by phone, email, text, and chat through Facebook and Twitter.
Many account types
Unlike many of TD Ameritrade's robo-advisor competitors, TD Ameritrade Essential Portfolios supports a long list of account types. In addition to individual and joint brokerage accounts, you can open an Essential Portfolios IRA (traditional, Roth, rollover, SEP, or SIMPLE), Coverdell ESA, trust, solo 401(k) (traditional or Roth), custodial, or business account. Virtually every type of investment account can be accommodated.
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What could be improved
Management fee could be lower
TD Ameritrade Essential Portfolios charges a 0.30% annual account management fee. This means you'll pay $3 in management fees for every $1,000 you’ve invested. This isn't the highest we've seen, and TD Ameritrade offers some impressive features, but it's on the upper end of the spectrum of our favorite robo-advisors.
High minimum without future commitments
TD Ameritrade Essential Portfolios requires investors to deposit at least $5,000 to get started or $500 plus a commitment to make automatic deposits. That's on the high end of the robo-advisors we cover, and could be a turn-off for newer investors who may not have a lot of capital to commit.
Access to human advisors
Unlike some of its competitors, TD Ameritrade Essential Portfolios doesn't give clients access to human financial advisors. It does have Portfolios Specialists to answer questions about the service, but if you want advice for things like saving money to buy a house or creating a budget, you might be better off looking elsewhere.
How TD Ameritrade Essential Portfolios works
Like most robo-advisors, TD Ameritrade Essential Portfolios asks new clients to fill out a short questionnaire to determine risk tolerance and investment goals. Based on these results, you get a recommended portfolio. You can accept the recommendations, modify your risk level, or choose a specific approach (such as the Socially Aware Portfolios).
Services offered
TD Ameritrade Essential Portfolios offers standard robo-advisor services such as automatic portfolio rebalancing and professionally designed investment portfolios. In addition, it offers a few stand-out services. For example, TD Ameritrade Essential Portfolios is one of the only robo-advisors that offers free and automatic tax-loss harvesting, and it's the only one on our best robo-advisors list to offer it to clients of all account sizes. This is a strategy by which a robo-advisor strategically sells investments that have declined in value and re-invests this capital elsewhere to offset taxable gains on other investments. If you have a larger account or are in one of the higher tax brackets, this feature alone can more than pay for TD Ameritrade's management fee.
TD Ameritrade is one of a few robo-advisors offering socially aware portfolios, but offers a wider selection than most, and uses some of the cheapest socially responsible ETFs to construct these portfolios.
Pricing and fees
When it comes to pricing, TD Ameritrade Essential Portfolios isn't the cheapest in the business, but it still delivers good value considering its features. Here's a breakdown of the cost structure:
Service/Item | TD Ameritrade Essential Portfolios Cost |
---|---|
Account management fee | 0.30% |
Investment fund fees | 0.06%-0.17% |
All-in fees | 0.36%-0.47% |
Other account charges | None |
Customer service and support
There are two types of support clients of a robo-advisor could need -- investment advice from a human being, and help with technical issues. No access to human financial advisors is included with TD Ameritrade Essential Portfolios. TD Ameritrade offers higher-level services that include personalized financial advice from advisors, but it's not a part of the basic robo-advisor service.
On the other hand, TD Ameritrade has excellent customer service when it comes to general account help. Not only is there support by phone and email, you can obtain help via Facebook and Twitter messaging. Simply put, great customer satisfaction can't be overlooked and it's a key feature when choosing the best stock broker for your needs.
TD Ameritrade Essential Portfolios is right for you if:
- You have at least $500 to invest, or $5,000 if you don't want to commit to recurring deposits.
- You want to invest in a socially responsible manner at a minimal cost.
- You don't need to speak with a human financial advisor.
- You are concerned by the tax implications of your investments.
- You want to open a specialized type of account, such as a solo 401(k), a trust, or an account for a business entity.
FAQs
TD Ameritrade was acquired by Charles Schwab, and as of 2023, stopped accepting new clients for its managed portfolio products, including Essential Portfolios. Existing Essential Portfolio accounts are set to be migrated to Schwab's platform on Sept. 1, 2023, and while investments will remain intact, they will become self-directed accounts, not robo-advisory accounts.
TD Ameritrade Essential Portfolios charge a 0.30% management fee, and the underlying investments in accounts have their own fees. All-in, Essential Portfolios fees range from 0.36% to 0.47% of assets per year.