Robo-Advisors in 2026: Fees, Cash Drag, and What Tax-Loss Harvesting Really Delivers

A robo-advisor puts you into a diversified mix of index ETFs based on a questionnaire, then rebalances it and, if you use a taxable account, may sell losers to harvest tax losses. The service is simple, so the useful comparison is mostly about cost. Two providers can charge the same headline fee and still differ in balance minimums, cash holdings, and the conditions on tax-loss harvesting.

This guide compares four providers using their own published terms as of September 2026, calculates what a fee costs over 30 years, and explains what tax-loss harvesting claims do and do not mean. For advice from a human planner, see our guide to choosing a financial advisor and the fiduciary standard.

What each provider charges

Sources are each provider's own pages: Betterment's pricing page, Wealthfront's pricing page, Schwab's June 30, 2026 disclosure brochure for the cash range and harvesting minimum, and Vanguard's service agreement effective September 24, 2026 for the net fee estimate. Vanguard's page says the gross fee does not include fund expense ratios, and Schwab's page says its clients pay the ETFs' operating expenses; check the other providers' fund costs too, since underlying ETFs charge their own fees on top of any advisory fee.

Vanguard's net fee is the gross fee minus the revenue Vanguard itself keeps from the funds in your portfolio, so it depends on what you hold. Vanguard Personal Advisor, its service with human planners, has an expected net fee of about 0.30% to 0.31% for all-index portfolios in the same agreement.

Betterment's flat fee on small balances

Betterment's $5 monthly fee is $60 a year. On a small account that is a high percentage:

At $24,000 the flat fee equals the percentage fee, which is why Betterment switches you to 0.25% at that balance. A smaller account can get the 0.25% rate by setting up $200 a month in recurring deposits. If you cannot commit to that, a small balance at Betterment is expensive relative to a low-cost index fund.

Schwab's cash allocation

Schwab says on its own page that it charges no advisory fee "in part because of" the revenue its bank earns on the cash allocation. Its brochure says the allocation generally runs from 6% to 30%, depending on the strategy chosen by risk tolerance and time horizon. Cash sits in deposit accounts at Charles Schwab Bank. The brochure notes that in similar programs clients might expect to pay 0.30% a year.

Illustration: the sweep rate on the cash was 3.29% effective September 1, 2026, while the 3-month Treasury bill yielded 3.92% on the same day. That 0.63 percentage point gap costs 0.04% of the whole portfolio a year at a 6% cash allocation, 0.06% at 10%, and 0.19% at 30%. Those figures are small next to a 0.25% fee, so the yield gap alone does not make the service expensive. The larger effect is that holding 30% in cash instead of investments changes the portfolio's expected growth, and that is a risk decision Schwab makes for you based on your profile. Schwab's brochure says the bank's revenue rises with the cash allocation and the spread, and that the spread has historically widened when rates rose.

In June 2022 the SEC announced that two Schwab subsidiaries agreed to pay $187 million ($52 million in disgorgement and interest and a $135 million penalty). The SEC said that from March 2015 through November 2018 Schwab's disclosures described the cash levels as the product of a disciplined method, while its own analyses showed the cash would reduce client returns under most market conditions. Schwab's current pages disclose the sweep arrangement, but the case is a reason to read the brochure, not the marketing.

Thirty years of fees

Fees compound. Illustration: $100,000 invested for 30 years, with a 6.0% annual return before costs, and underlying fund costs of 0.08% a year in every case (an assumption). The table shows what each advisory fee level leaves.

At 0.25% the account pays about $18,653 in fees over the 30 years, yet the loss in ending wealth is $38,427, because each fee dollar would have kept growing. The 1.00% row is a reference point for comparison and is not a claim about what advisors charge; see our wealth management fees guide for how advisor fees are structured and what they should buy. The 0.65% row matches Betterment Premium's rate on the first $1 million.

The takeaway from the table is limited. A 0.25% robo fee costs about 7% of ending wealth in this example, which is easy to justify if it keeps you invested and rebalanced. It is harder to justify if you would hold a target-date or index fund on your own for a fraction of the cost. Our index fund guide covers that do-it-yourself baseline.

What tax-loss harvesting claims mean

Tax-loss harvesting means selling an investment that has fallen, realizing the loss, and buying a similar but not identical investment so the portfolio stays invested. Capital losses offset capital gains, and if losses exceed gains, up to $3,000 a year of ordinary income, with the rest carried forward. Betterment, Wealthfront, Schwab, and Vanguard all offer it in taxable accounts. Our tax-loss harvesting guide covers the mechanics.

What the providers say:

• Betterment says nearly 70% of customers using tax-loss harvesting had their taxable advisory fees covered by estimated tax savings, based on its internal calculations. Its pricing page dates that figure to 2022, a year with large market losses to harvest, so it may not repeat in calmer years.
• Wealthfront says harvesting benefits will vary and that it does not give tax advice.
• Schwab's brochure says harvesting needs a $50,000 balance to become active, that a replacement ETF sold at a loss within 30 days would trigger a wash sale, and that the benefit depends on the client's entire tax and investment profile.
• Vanguard's page says harvesting is included in the advisory fee and carries risks including higher costs in the new investment, tracking error, and unintended tax consequences.

Three limits apply to any provider:

1. The saving is usually a deferral. The replacement ETF has a lower cost basis, so a later sale creates a bigger gain. The permanent saving arrives only if you hold until death, donate the shares, or pay a lower rate later.
2. Losses need gains or income to use. Illustration: a $10,000 harvested loss that offsets gains taxed at 15% saves $1,500 now. If the deferred $1,500 comes due 20 years later and you discount it at 5%, the saving is worth about $935 today, or $579 at 10 years and $1,153 at 30. If there are no gains, the loss offsets $3,000 of ordinary income a year, so a $10,000 loss takes four years to use and at a 24% rate saves $2,400 in total.
3. The wash-sale rule reaches outside the account. Buying the same or a substantially identical security in another account you own, including an IRA, can disallow the loss under Rev. Rul. 2008-5. Schwab's brochure says it monitors only accounts enrolled in its program and that clients are responsible for watching their and their spouse's other accounts.

In an IRA or 401(k), harvesting does nothing because losses there have no tax effect. Investors who harvest at scale on individual stocks rather than ETFs may prefer direct indexing.

Choosing among them

• Balance under $24,000 with no monthly deposits: Betterment's flat fee is the costliest per dollar, and a target-date or index fund is worth comparing. Wealthfront, Vanguard, and Schwab do not carry a flat monthly fee, according to their pages.
• Long horizon in a taxable account: check that harvesting is active at your balance. Schwab needs $50,000, and the others do not list a minimum on the pages we read.
• Low fees above all: Vanguard's net fee of about 0.15% to 0.16% is lowest among the advisory fees here, and Schwab's advisory fee is zero, but check the cash allocation you would be assigned.
• Want a human to talk to: compare Betterment Premium at 0.65% with Vanguard Personal Advisor at about 0.30% to 0.31% and with fee-only planners; the latter are covered in our advisor selection guide.
• Complicated finances: business sales, trusts, concentrated stock, or large windfalls usually call for a person, and our financial planning guide covers what to plan for.

Whatever you choose, look up the current fee schedule on the provider's page and read the disclosure brochure. Terms change, and the numbers above are as of September 2026.

This guide is for informational purposes only and does not constitute investment or tax advice. Fees and terms are from providers' own published pages as of September 2026 and can change. Illustrations use assumed returns and tax rates and are not forecasts. Investing involves risk, including loss of principal. Consult a qualified financial advisor or tax professional before making decisions.