DIY vs Robo-Advisor — When to Manage Your Own Portfolio

Overview

Should you build your own portfolio or let a robo-advisor handle it? Compare the cost savings, time investment, and potential performance differences. A three-fund DIY portfolio can save you 0.25% or more per year, but you'll need discipline for rebalancing and tax optimisation on your own. Use our compound interest calculator to see how even small fee savings compound over decades. Browse the robo-advisors hub to compare top platforms, or check out Vanguard Digital Advisor for the cheapest automated option.

Key Takeaways

• DIY cost: fund expenses only (~0.03-0.10%). Robo cost: management fee + fund expenses (~0.25-0.50%).
• DIY requires discipline for rebalancing, tax optimisation, and avoiding emotional decisions.
• On a $500K portfolio, the 0.25% robo fee is $1,250/year — the question is whether automation is worth it.
• Hybrid approach: use a robo for taxable accounts (TLH value) and DIY for tax-advantaged accounts (no TLH benefit).

Practical Tips

• If you enjoy investing and are disciplined, DIY with 3-fund portfolio (VTI + VXUS + BND) saves the most.
• If you'd otherwise not invest, or panic-sell in downturns, a robo-advisor's guardrails are worth the fee.
• Calculate your 'hourly rate' for investing time — if rebalancing and TLH take 5 hours/year, what's your time worth?