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The Differences Between Micro-Investing, Robo-Advisors, and Stock Trading Apps

Although there may be some overlap, each platform performs distinct functions better than others.

Learn how to distinguish the difference between the most popular investing platforms.

It’s easier than ever to become an investor. But with so many options to choose from, it can be quite daunting to figure out which platform is right for you and your situation. The choices include stock trading apps, discount online brokerages, micro-savings apps, and robo-advisors.

These apps all serve the purpose of removing the barriers that have once prevented many people from investing.

My goal is to help explain the differences so you can decide the best investment tool for your needs.

What are Discount Online Brokerages?

A discount online brokerage is often associated with companies like Charles Schwab and Ally Invest. A discount broker is a stockbroker that performs buy and sell orders at a reduced commission rate. Most discount brokers operate using online platforms without the need to directly engage with a stockbroker.

Trades are completed using the online platform reducing the cost thus discounting the commission you’d pay. However, since upstart investing apps like Robinhood began offering free stock trades, many online brokerages are now offering free stock trading or zero-commission fees.

You pay less using an online brokerage. However, you’re in charge of managing your trades. If you need the help of a broker, it may be available with the same platform, but can also include additional fees.

What can you do with an online brokerage account?

You can buy and sell stocks and index funds. Additionally, many platforms offer research tools and a knowledge base to help you make better-informed trades.

Who is it for? For investors who want more trading capabilities and the lowest commissions and fees for trading stocks, mutual funds, and exchange-traded funds.

What are Stock Trading Apps?

Stock trading apps are mobile-first online brokerages that allow you to buy and sell securities through your smartphone. The Robinhood app was the first to enter the market offering investors an opportunity to buy and sell stocks without paying commissions to the brokerage firm. Now, you have more options to choose from.

With stock trading apps, you can buy and sell stocks as you would with online brokerages. However, there are some tradeoffs. Some free stock trading apps may not offer desktop access or have limited research tools and delayed execution of trades.

We listed some of the best free stock trading apps for you to check out. They include Robinhood, Webull, Public, and M1 Finance. They all offer a distinct advantage. Don’t know which to choose? The great thing is they are free with no minimums so you can try them all.

Who is it for? These apps are great for just about anyone interested in buying and selling stocks. Again, some apps offer a much more robust toolset. Depending on your needs there’s a free stock trading app for you. I recommend looking at Webull for the active trader with intermediate experience. And if you’re looking to get more guidance, then M1 Finance is a great robo-advisor hybrid option. Want access to a community? Public offers one of the best communities of traders and experts in a Twitter-like feed within the app.

What are Micro-investing Apps?

Micro-investing apps help people accumulate investments in a small incremental way. They are often associated with fractional shares. Some apps allow investors to start with as little as $1 to buy a fraction of shares or ETFs (exchange-traded funds). The goal behind micro-investing is to open the stock market to people who may not have hundreds or thousands of dollars to get started.

A key benefit of micro-investing apps is the ability to purchase a piece of your favorite company whose full stock price may be out of your price range. For example, Amazon’s $3,000 per share may be too hefty for most people, but with micro-investing, you can buy just $1, a fraction of the share. And you can automate the investments to purchase more “pieces” of Amazon until one day you own one full share.

Acorns was the early pioneer of micro-investing. For example, Acorns’ feature would round up your purchases to the nearest dollar and then automatically invest in select ETFs once you’ve reached $5. Today, you have more options to choose from such as Stash (my current favorite) that offers Round-ups and automatic investing for as little as $1. They give you more options from stocks to ETFs.

Want other options to purchase fractional shares? Robinhood, Public, and M1 Finance are good contenders as well.

Who is it for? Micro-investing apps are great for people new to investing who want to start small and with little effort. With small incremental withdrawals from your checking account into a micro-investing account, you won’t often notice allowing you to continue spending while investing.

What are Robo Advisors?

A robo-advisor is distinct from the other platform as it offers guided advice through an investment philosophy and proprietary algorithms.

A robo-advisor app gives smaller investors access to advisory services that were typically only offered to high net-worth individuals. If you’ve heard the term wealth management, then think of robo-advisors as online wealth management platforms. They offer algorithmic and automated portfolio management.

Robo-advisors can assist you with targeted retirement goals, college savings plans, tax-loss harvesting, portfolio rebalancing, 401-k investment reviews, and other retirement accounts, and more.

When you open an account with a robo-advisor expect to answer questions about your goals, risk tolerance, age, and desired retirement. Based on your answers, their algorithms will then recommend a portfolio of stocks, bonds, and other investments. Expect that most recommendations will be low-cost indexed funds or ETFs.

Robo advisors often have zero or low initial deposit requirements with fees based on your account balances assessed per year. These fees are lower than what you’d expect from traditional investment advisory services.

Examples of well-known robo-advisors include Betterment, Wealthfront, and M1 Finance.

Who is it for? Investors who want online financial advice or investment management support with minimal human intervention.

Which platform should you use?

It all depends on your goals and the help you need to reach them. In my own investment journey, I used many platforms and have gotten great insight from each. I foresee myself continuing to use online brokerages/stock trading apps, micro-investing apps, and robo-advisors. They all serve a distinct function.

You don’t have to do as I do. And this is in no way investment advice. What I want to share is that these apps can meet your specific needs. It may be a matter of you figuring out the best and easiest way to get started investing.

To choose the right platform, ask yourself what do you need? Is it guidance? Advice? Or do you want to DIY and take the reigns?

Now, if you’re looking for more concrete recommendations, I suggest the following:

For new investors who haven’t done so before: Acorns and Stash

For active investors or those who want to buy/sell stocks: Webull and Robinhood

For investors who want a mix of guidance and DIY: M1 Finance

For hands-off approach and let experts do the work: M1 Finance and Betterment

For investors who want to learn from a community: Public

Want more options? Check the financial marketplace for the latest and best-investing apps.

Another great resource for unbias investing knowledge is

What about retirement accounts?

Want to open an Individual Retirement Account (IRA), then look into robo-advisors for the most guided option. If you have a current 401(k) and want to determine if it’s working for you, get a free analysis using Blooom.

Jason Vitug

Jason Vitug is a bestselling author, entrepreneur, and founder of and His purpose to help others live their best lives through experiential and purposeful living. Jason is also a certified yoga teacher and breathwork specialist and has traveled to over 40 countries.

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