How to Get Started with U.S. Automated Investing: A Guide for Canadians and U.S. Residents
Imagine setting up your investments while sipping coffee at home, letting technology handle the heavy lifting. Automated investing, also known as robo-advising, utilizes algorithms to manage your portfolio with minimal effort on your part. For U.S. residents, this process is straightforward. For Canadian residents, accessing U.S. automated investing requires navigating unique cross-border compliance rules, but it remains a highly effective way to gain U.S. market exposure. This guide provides a thorough breakdown of how you can get started with U.S. automated investing, practical steps, and key insights to build your wealth at ease in 2025. If you’re new to robo-advisors in general, consider exploring options tailored for beginners back home in our guide on how to pick the best robo-advisor in Canada.
What is Automated Investing?
Automated investing utilizes digital platforms (or robo-advisors) to build and manage investment portfolios based on your goals, risk comfort, and timeframe. Digital platforms, such as Wealthfront or Betterment, consistently use algorithms to select and diversify asset classes, mainly utilizing U.S. stocks, ETFs, and bonds. The U.S. Securities and Exchange Commission (SEC) regulates these services, ensuring they operate with transparency and address conflicts of interest, reinforcing their role as a cost-effective and user-friendly option ideal for novice investors.
In comparison to the conventional advisors, robo-advisors are characterized by low fees (usually-0.25%-0.50% per annum) and little human intervention. AI-enhanced personalization will go a step further to adapt to market trends in real time, creating a more precise portfolio in 2025, which is described in the 2025 Technology Trends. For a broader overview of top platforms available to Canadians, check out our review of the best robo-advisors in Canada.
Benefits for U.S. Residents and Canadian Investors
Robo-advisors offer distinct advantages tailored to investors on both sides of the border:
- For U.S. Residents: They enjoy low-cost, sophisticated diversification and tax optimization (like tax-loss harvesting) without requiring intense market knowledge.
- For Canadian Investors: They gain seamless, low-cost access to the vast global markets, including popular U.S. tech-heavy ETFs and blue-chip stocks, through Canadian-based robo-advisors.
Both groups enjoy the core benefits of automated investing:
- Low Fees: Robo-advisors have significantly lower fees (typically ∼0.25%) than traditional human advisors (∼1.00% or more).
- Accessibility: Many platforms require a very low minimum investment, often starting at just $1 at major providers, making investing easy to start.
- Automation: Essential services like rebalancing (to maintain your risk profile) and tax-loss harvesting (to minimize taxes on gains) are managed automatically.
- Flexibility: The digital nature allows users to easily change goals and risk comfort at any time, which is ideal for busy professionals.
According to Morningstar’s 2025 Digital Advice report, robo-advisors are currently applying AI to forecast market changes, enhancing returns to their users through more proactive portfolio management.
Choosing the Right Robo-Advisor
Choosing a robo-advisor should align with your investment objectives and budget. According to recent 2025 rankings from sources like NerdWallet and Investopedia, the following U.S. platforms are considered top contenders:
| Robo-Advisor | Key Feature | Details |
| Wealthfront | Best for Tax Efficiency | Known for robust, daily tax-loss harvesting and specialized portfolios to maximize after-tax returns. |
| Betterment | Ideal for Goal-Oriented Investing | Excellent goal-tracking tools, cash management features, and multiple portfolio options. |
| Fidelity Go | Best for Low Costs/Beginners | Charges $0 advisory fees for accounts under $25,000, with no account minimum to start. |
| Schwab Intelligent Portfolios | No Advisory Fees | The standard service charges a 0% advisory fee, but it has a high $5,000 account minimum to open. |
| Vanguard Digital Advisor | Low-Cost Index Funds | Uses Vanguard’s proprietary, low-expense ETFs and is known for its straightforward, all-index approach. |
When evaluating platforms, pay attention to the following:
- Fees: Compare the advisory fee (percentage of assets) and the expense ratios (cost of the underlying ETFs).
- Account Minimums: Determine the minimum deposit required to open an account and to qualify for premium features (like tax-loss harvesting, which often requires a balance of $50,000 or more).
Canadians should be aware that most major U.S. robo-advisors are not available to them. Canadian residents are required to choose a locally regulated Canadian robo-advisor and verify the platform supports cross-border accounts if they have U.S. assets (like a 401k/IRA). For those interested in aligning investments with values, our article on the best SRI robo-advisors in Canada offers helpful ethical options.
Step‑by‑Step Guide to Getting Started
- Assess Your Goals
Are you saving for retirement, a home, or another milestone? Establish a clear time frame and determine how much risk you’re willing to take.
- Choose a Platform
Find robo-advisors that fit your goals. Read the latest reviews on Investopedia.
- Open an Account
Register on the Internet, provide your personal information, and connect a bank account. The process takes minutes to complete for most services.
- Complete the Questionnaire
Provide information regarding your income, goals, and risk tolerance to have the platform create a customized portfolio.
- Fund Your Account
Place a deposit that feels comfortable; most popular platforms have low minimums, but be sure to check the required amount for the one you chose.
- Monitor and Adjust
Periodically review performance through the app or site, and adjust your goals accordingly.
Tax Considerations for Cross‑Border Investing
There are special tax regulations that apply to Canadians who invest in the U.S. The Canada-U.S. tax treaty applies a withholding tax of 15% on U.S. dividends. This withholding tax can be eliminated (reduced to 0%) by holding the U.S. investments directly in a Registered Retirement Savings Plan (RRSP) or RRIF. U.S. residents are required to report gains to the IRS, while Canadians are required to report to the CRA. It’s important to consult a tax professional to optimize your strategy, particularly in the case of cross-border accounts.
Common Pitfalls to Avoid
- Disregarding Fees: Fees are cumulative, even in small amounts. Compare platforms critically.
- Ignoring Taxes: Canadians should take into consideration U.S. withholding taxes and currency conversion costs.
- Set-and-Forget Mindset: Periodically, take a look at your portfolio to make sure it is on course.
- Chasing Trends: Invest in diversified portfolios instead of hot stocks.
Conclusion
The U.S. automated investing is a game-changer for Canadians and U.S. residents who want to build wealth without much effort. With the help of selecting a reliable robo-advisor, having clear goals, and being aware of tax considerations, you can begin investing with confidence. For Canadians, explore services like Wealthsimple or Questwealth Portfolios to check your options. U.S. residents may look into Wealthfront or Betterment. Always consult a financial advisor for personalized advice. Ready to grow your wealth? Take the first step today and let automation work for you.