Betterment Review – Helping You Invest Better
- What is Betterment?
- How does Betterment work?
- How much does Betterment cost?
- Betterment features
- Betterment investments
- Who is Betterment best for?
- Pros & cons
- Betterment vs. competitors
- The bottom line
What is Betterment?
How does Betterment work?
How much does Betterment cost?
Betterment Premium plan
Getting Started package
Tax Coordinated Portfolio
Tax Los Harvesting
Assets and Allocations
- Betterment Core Portfolio. The standard portfolio provided by Betterment uses a mix of ETFs and bonds personalized for your goals and risk tolerance.
- BlackRock Target Income Portfolio. This portfolio is made up of only bond funds to generate income with low risk.
- Goldman Sachs Smart Beta Portfolio. This portfolio invests in companies that are deemed low volatility and high quality to provide better returns.
- Socially Responsible (SRI) Portfolio. This portfolio invests in companies that have a positive impact on the environment and social economics for socially responsible investing.
- Flexible Portfolio. You can elect to create your portfolio with the help of Betterment for advice.
Who is Betterment best for?
People who aren’t sure what their goals are
Who shouldn’t use Betterment?
Pros & cons
- Employment background. Betterment’s initial set-up process is a bit different than some of its competitors. I appreciate that they include employment background questions in their initial information gathering process. Your employment status can have a drastic effect on your financial situation, so your robo advisor must understand where you’re coming from.
- Goal-based focus. The fact that Betterment is goal-based makes this service accessible for nearly any user. If you have a vague idea of what you want to save for, Betterment can help you. If you can’t articulate your goals, that’s fine too, because Betterment will lay out the options that it suggests for you.
- Plan options. Betterment can make your money work for you, no matter how much money you have to invest. The digital plan makes investing accessible with its $0 minimum account balance. If you have money to invest, the premium plan offers additional services to benefit you as long as you meet the minimum account balance.
Additional cost for human support. Robo advisors can be beneficial in many ways. They’re a more affordable way for many people to begin investing, and their automated approach makes it easy to set it and forget it. However, if you’re looking for someone to help show you the ropes directly, robo advisors such as Betterment may not be right for you. Unless you have enough money to meet the minimum account investment of Betterment’s premium plan, you’ll need to pay extra to get direct financial advice from a human.
Betterment vs. competitors
|Company||Starting plan stats||Premium plan stats|
|Betterment||$0 minimum account balance, 0.25% annual management fee||$100k minimum account balance, 0.40% annual fee|
|Charles Schwab||$5,000 minimum account balance||$25k minimum account balance, $300 planning fee, $30/mo advisory fee|
|Fidelity||$0 account minimum, $0 to 0.35% annually fee||$25k minimum account balance, 0.50% advisory fee|
|Wealthfront||$500 minimum account balance, 0.25% annual fee||$500 minimum account balance, 0.25% annual fee|
- If your balance is less than $10,000, you’ll pay $0.
- If your balance is between $10,000 and $49,000, you’ll pay $3 monthly/
- If your balance is $50,000 or above, you’ll pay 0.35% annually.
The bottom line
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