Betterment has plenty going for it, including access to fractional shares, automated portfolio rebalancing and diversification across 10 asset classes. But depending on your investment goals, the grass may be greener with one of these five Betterment alternatives.
1. Acorns
- More automated investing features than Betterment.
This platform's flat-rate robo-advisor rounds up debit purchases to invest the difference on your behalf. Acorns sets itself apart from Betterment — and many other robo-advisors — with a round-up feature and flat-rate pricing. Most automated investment platforms charge a percentage-based management fee, but Acorns opts for flat-rate monthly pricing that's at its most competitive for portfolios of $5,000 or more. To use this platform's robo-advisor, you must link a debit card to your account. Acorns then rounds up any purchases you make and invests the difference.
| Account types | IRA |
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| Annual fee | $36 per year |
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| Available asset types | Stocks, ETFs |
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2. SoFi
- Lower fees than Betterment.
While it lacks tax-loss harvesting, SoFi's robo-advisor is entirely free to use. We like SoFi for its automatic portfolio rebalancing, unlimited access to financial planners and best of all — its entirely free robo-advisor service. While the platform hasn't been around quite as long as Betterment, SoFi's free robo-advisor is tough to compete with.
| Account types | Brokerage, IRA |
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| Available asset types | ETFs |
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3. Blooom
- Better than Betterment for bigger portfolios.
Blooom can help you grow your retirement savings, but its fixed annual fee pricing structure means it's only cost-effective for larger portfolios. Blooom offers automated investment portfolios designed for investors with employer-sponsored accounts, like 401(k)s and 401(a)s. Fees are assessed on an annual basis, and plans start at $45 per year. The fixed cost of entry means that for Blooom's service to be cheaper than Betterment's, you'll need a portfolio of at least $20,000. Still, for those seeking guidance with an employer-sponsored account, Blooom offers portfolio analysis, automatic portfolio rebalancing and — with the higher tiers of service — access to financial advisers.
| Account types | Retirement, Robo-Advisor |
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| Annual fee | $45 per year |
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4. M1 Finance
- Greater control over your portfolio than Betterment.
M1 Finance is ideal for investors seeking more autonomy over their investments. The platform essentially acts as a happy medium between fully automated investing and self-directed trades. M1 Finance invites investors to pick out their own investment slices that it later combines into investment “pies.” Your investment pie is your portfolio, which M1 then monitors and rebalances on your behalf. The service is free to use and various accounts are available, including traditional and Roth IRAs. But it lacks Betterment’s tax-loss harvesting feature, and new investors may not feel comfortable picking their own investments.
| Account types | Brokerage, IRA |
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| Annual fee | 0% |
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| Available asset types | Stocks, ETFs, Cryptocurrency |
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5. Wealthfront
- Better for families saving for their children's education than Betterment.
With similar management fees and asset classes, Wealthfront's major edge over Betterment is its college savings account. Wealthfront has plenty in common with Betterment, including a 0.25% annual management fee, a spread of over 10 asset classes and tax-loss harvesting options. In fact, the platforms share so much in common that there's really only one reason to opt for Wealthfront over Betterment: the ability to open a 529 college savings account. If you're interested in saving for higher education expenses, Wealthfront is your best bet. But be prepared for a $500 minimum deposit and lack of access to fractional shares.
| Account types | IRA |
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| Annual fee | 0.25% |
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| Available asset types | Stocks, ETFs |
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Pros and cons of Betterment
Consider the following benefits and drawbacks of investing with Betterment.
Pros
- Tax-loss harvesting. Asset allocation is consistently monitored to minimize potential taxes.
- Fractional shares. The availability of fractional shares ensures every penny in your portfolio is put to practical use.
- Automated rebalancing. If your investments stray further than 3% off their target ratios, your portfolio is automatically adjusted.
Cons
- No direct indexing. Betterment investors don’t have access to direct indexing opportunities.
- Withdrawal delays. Some investors complain of account withdrawal delays.
- Expert-built portfolios matched to your goals
- Personalized financial planning
INVESTMENT PRODUCTS ARE: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE. Finder receives compensation when you click or tap through to, open an account with or provide your contact information to J.P. Morgan Wealth Management.
Interested in switching brokers? The process will depend on the type of account you have and the platform you plan to move to. Betterment doesn’t charge any account transfer fees, and most brokers don’t charge anything for account setup.
Here’s what to expect of the process.
- Inform your new broker of the transfer and provide them with your Betterment account number.
- Complete the transfer paperwork from your new broker. For accounts under $250,000, your signature must be notarized or medallion signature guaranteed. For accounts over $250,000, your signature must be medallion signature guaranteed.
- Mail your transfer paperwork, including a copy of the first page of your most recent Betterment statement, to Betterment Transfers, PO Box 207691, Dallas TX 75320-769.
Full shares from individual accounts will be transferred directly to your new institution. For IRA to IRA transfers, Betterment will send a check to your new brokerage.
Review your options by comparing minimum deposits, asset types and annual fees, or select the Go to site button to learn more about a particular service.
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Finder is not an adviser or brokerage service. Information on this page is for educational purposes only and not a recommendation to invest with any one company, trade specific stocks or fund specific investments. All editorial opinions are our own.
