Rebalancing keeps your portfolio aligned with your target allocation. We evaluated tools on their ability to calculate optimal trades, minimize taxes, and handle multi-account portfolios.
Updated February 2026
Best for hands-off automated rebalancing
Wealthfront's automated rebalancing is industry-leading for managed accounts. It uses tax-loss harvesting and drift thresholds to rebalance without triggering unnecessary taxes.
Best for goal-based investors who want automated rebalancing
Betterment offers automated rebalancing with smart tax coordination across IRA and taxable accounts. The goal-based approach makes it easy to set target allocations per goal.
Best for self-directed investors who want cross-account allocation visibility
Clarity shows your current allocation vs. targets across all connected accounts. While it does not execute trades, the AI assistant can suggest rebalancing trades factoring in tax implications.
Best free option for investors who want automated allocation management
M1 Finance's Pie system lets you set target allocations and automatically rebalances through new deposits and scheduled rebalancing events. Free for basic accounts.
Best for seeing allocation drift before deciding on an advisor
Empower's Investment Checkup shows allocation drift and suggests changes, but automated rebalancing is only available through their paid advisory service.
Most research suggests rebalancing when your allocation drifts 5%+ from targets, or quarterly at most. More frequent rebalancing generates unnecessary transaction costs and taxes. Threshold-based rebalancing generally outperforms calendar-based.
In taxable accounts, yes — selling appreciated assets to rebalance creates capital gains. Tax-aware tools minimize this by rebalancing through new contributions, tax-loss harvesting, and prioritizing rebalancing in tax-advantaged accounts first.
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