Shortly after Jared Franklin started working in 2007, he also began saving. But the now-29-year-old product manager at a Baltimore financial services start-up wasn’t sure how to create a balanced, diversified portfolio. On the recommendation of his parents, he opened an account with a financial adviser. But when his quarterly statements started coming in, he wondered what he was getting for the fees he paid. “I couldn’t understand why I was paying outrageous amounts when my balances weren’t growing much,” Franklin says.

Then, three years ago, he decided to try Wealthfront, one of a new breed of online advisers that use computer algorithms to recommend diversified, low-cost portfolios. Because Franklin has referred several of his friends to Wealthfront, he’s paying no adviser fees, but he will eventually pay 0.25 percent per year. “The strategy is simple, and at the end of the day I think the return on my investment will be better than the return I’d get on my own or with an adviser,” says Franklin. “So far I’m pleased.”

The frustration with fees that led Franklin to move his money is one that millions of individual investors share. The fact is, human financial advisers tend to be costly, usually charging around 1 percent of assets per year, regardless of whether the investments they manage gain or lose money. On an initial portfolio of $500,000, that would cost you almost $750,000 over a 30-year period, assuming average investment returns of 6 percent. Other advisers use a commission-based fee structure, lopping 3 to 6 percent off the top on any fund or annuity you buy.