Every online investing platform settles one thing before you settle anything: how much of the picking it does. A robo-advisor does all of it, asking a handful of questions about your risk tolerance and time frame and then assembling the portfolio.
A trading app does none, handing you a search box and letting you buy whatever you like. Both work from a phone. Minimums, fees and order types tend to follow from where a platform sits between those two.
Traditional Brokers, Apps, and Robo-Advisors
Online stock investing generally runs through one of three setups, and they differ mainly in how much of the decision-making lands on you.
| Platform type | Who picks the investments | Minimums | Examples |
|---|---|---|---|
| Traditional brokerage | You, often with access to research tools | May be higher | Fidelity, Charles Schwab |
| Online brokerage or app | You, stock by stock | Often low or none | Robinhood, Stash, M1 Finance |
| Robo-advisor | The platform, based on your answers | Varies by provider | Betterment, Wealthfront |
Traditional brokers are the firms many people already use without thinking about it. An employer 401(k) held at a company like Fidelity or Charles Schwab usually comes with online access to that account.
You don't need an employer plan to open something there, though account minimums can be higher than what an app asks for.
Online brokerages and investing apps ask the least up front. Many carry low minimums or none, and they're built around letting you choose individual holdings yourself.
Robo-advisors take the opposite approach. A portfolio drifts off its target percentages as markets move, and at Betterment or Wealthfront the platform pulls it back without being asked; both also run tax-loss harvesting.
The targets themselves come out of an allocation model. Your answers about time frame and risk tolerance set how much sits in stocks, how much in bonds, and how much in other assets, and low-cost ETFs fill those slots.
Which Platforms Allow Individual Stocks
This question rules platforms in or out, so it's worth settling before you compare fees or features.
If you'd rather own a broad slice of the market, index funds and ETFs do that without requiring you to identify a winning company. Plenty of brokers offer them, and a robo-advisor is built entirely around them.
If you want to buy individual company shares, check that the platform actually allows it. Betterment and Acorns build prebuilt portfolios and don't offer individual shares. Robinhood, Stash, and M1 Finance all do, and Robinhood is set up for active trading as well.
Account Minimums and Fractional Shares
Some platforms want a deposit before you can start; others don't. Betterment, Acorns, and Robinhood have no minimum investment requirement. Wealthfront requires $500 to get started. Stash lets you begin investing with $5.
What a minimum doesn't tell you is whether your starting balance is enough to spread across more than one holding. Fractional shares matter here, because a small deposit can otherwise buy very little of a high-priced stock. Stash, for instance, offers full or fractional shares.
Platform Fees and Fund Expense Ratios
The first layer is what the platform charges: a management fee on assets, or a commission on each trade if the broker charges per transaction. Robinhood charges no fees on trades.
The second layer sits inside the investments themselves. Mutual funds and ETFs carry expense ratios that come out of the fund regardless of who your broker is.
A commission-free app doesn't erase that cost. The two layers stack, so both belong in the comparison.
Time Horizon and Asset Allocation
Before choosing investments, it helps to name what the money is for and when you'll need it. Retirement sits at the far end, sometimes more than 10 years away.
Mid-range goals land somewhere around five to seven years out. Anything you expect to spend within three years counts as short-term.
That timing influences asset allocation. The longer the runway, the more stock exposure a portfolio can absorb; savings that have to be intact for a down payment in 18 months generally tilt toward bonds.
An example. Say someone is saving for a wedding roughly two years away and also putting money aside for retirement. Both pots can live at the same broker, but they don't sensibly hold the same mix.
The wedding money has no time to recover from a drop, while the retirement money has decades of contributions still ahead of it. Online allocation tools can help you sketch a starting point for each goal rather than guessing at both.
Opening the Account, Funding It, and Placing a First Order
The sequence below is roughly how account opening works across platforms; each step depends on the one before it.
- Pick the platform. Hands-off points toward a robo-advisor; wanting control over specific holdings points toward a broker offering individual stocks. Confirm you can clear the minimum and that the fees look reasonable to you.
- Open the account and answer whatever it asks. Opening an account online is often possible without putting any money in first. Plan on entering your Social Security number along with the usual personal details a financial firm has to collect. Robo-advisors typically run a series of questions to gauge risk tolerance before building a portfolio; other platforms may ask how often you expect to trade.
- Move money in. Most platforms let you link a bank account and transfer your opening deposit. Recurring automatic transfers are usually an option too, which is one way to make contributing automatic.
- Decide what to buy, in what size, and how the order goes in. On a self-directed platform, that means selecting holdings and share amounts, and stock screeners can help filter by criteria. With a robo-advisor, you can often adjust the suggested allocation. Then there's the order itself: a market order is what most people use, and it fills right away. The other order types behave differently, and the terminology is worth reading up on before you try one.
- Review the portfolio over time. A robo-advisor rebalances on its own. If you're doing it yourself, the work is watching for a holding that has grown into a larger share of the account than you meant it to have, selling part of it, and putting that money toward whatever slice has shrunk. In a taxable account, when you sell affects what you owe, so the calendar is part of the decision.
Funding Delays, Trade Timing, and Taxable Gains
Nothing can be bought until the money lands in the account, and bank transfers can take a few business days to settle depending on the platform.
That makes the first transfer, rather than the sign-up, the real start date, which is worth knowing if you've picked a launch date in your head.
Once the cash is there, a market order on an individual stock goes through during market hours as soon as it's placed.
Something the sales pages tend to skip: selling at a gain in a regular taxable account is a taxable event, and your broker will report those trades.
Retirement accounts work differently. Keeping goal money in the right type of account from the beginning saves untangling it later.
Who Each Setup Tends to Fit
All investing carries risk, including the risk of losing money you put in, and none of these platforms changes that. What they change is how much of the work you do.
A robo-advisor suits someone who wants a diversified portfolio assembled and maintained without ongoing input, and who's fine with ETFs rather than individual names.
A commission-free app suits someone who wants to choose specific stocks and is willing to learn order types and screeners to do it.
A traditional brokerage suits someone who values deeper research tools or already has a workplace account there, and who can meet a potentially higher minimum.
Four things separate the platforms in this guide, and all four are visible before you deposit anything: the minimum, whether individual stocks are on the menu, the commission or management fee, and the expense ratios of the funds the platform would put you in.
