Several robo trading services allow investing without a fee up to a certain amount. Why would someone not take advantage of this and spread their investments over several such services to minimize fees? Is the only reason convenience?

Looking at services like Betterment, WealthFront, Charles Schwab, Motif. Some of these said under a certain amount was managed free.

  • 2
    Can you give an example of at least two of the services you're talking about? Because I bet if you do the math, it actually will not minimize fees. (But I need their exact fee schedules to do the math.) Commented Dec 8, 2016 at 10:03
  • You're probably better off with a set of index funds...
    – keshlam
    Commented Dec 8, 2016 at 15:55
  • Motif Investing closed in May 2020.
    – Flux
    Commented Oct 1, 2020 at 9:04

1 Answer 1


In theory this could lead to problematic investments being made, since no individual robot would know what the others are doing. For instance, one robot might decide to sell a certain stock or fund for tax loss harvesting purposes, but a different robot might buy the fund the next day for its own reasons. This would count as a wash sale and would affect your tax liability, but neither robot would be aware of it, so they probably wouldn't notify you of it correctly, so you might not pay the correct tax, which would clearly be bad.

Similar problems could arise, for instance, if the different robots have different rebalancing strategies, leading to an overall allocation that isn't optimal.

In general the idea of these services is that the robots do complicated things that can save you (or make you) money, and they hide this complexity from you. Without knowing exactly what they're doing, it's difficult to ensure that the aggregate action of multiple robots would still be beneficial; they could be canceling each other out, or worse.

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