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Betterment alternatives
Expand your account options and cut down on fees with these 5 robo-advisors.
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.
Betterment alternatives
SoFi
While it lacks tax-loss harvesting, SoFi’s robo-advisor is entirely free to use.
- Consider switching from Betterment if: you’re an active trader.
- Best for: Hands-off investors just getting started with automatic investing.
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.
- Management fee. $0
- Account types. Individual, joint, traditional IRAs, Roth IRAs
- Asset types. ETFs
- Account minimum. $0
Acorns
This platform’s flat-rate robo-advisor rounds up debit purchases to invest the difference on your behalf.
- Consider switching from Betterment if: you have more than $5,000 in your portfolio.
- Best for: hands-off investors seeking a flat-rate robo-advisor.
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.
- Management fee. $1 – $5 monthly
- Account types. Individual, traditional IRA, Roth IRA, SEP IRA, UTMA, UGMA
- Asset types. ETFs
- Account minimum. $0
Blooom
Blooom can help you grow your retirement savings, but its fixed annual fee pricing structure means it’s only cost-effective for larger portfolios.
- Consider switching from Betterment if: you’d like help managing an employer-sponsored retirement account.
- Best for: investors with portfolios of $20,000 or more.
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.
- Management fee. $45 annually
- Account types. 401(k), 403(b), 401(a), 457 and TSP plans
- Asset types. ETFs
- Account minimum. $0
Wealthfront
With similar management fees and asset classes, Wealthfront’s major edge over Betterment is its college savings account.
- Consider switching from Betterment if: you need to open a 529 college savings account.
- Best for: investors who want to analyze their financial habits to help them determine a long-term investment plan.
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.
- Management fee. 0.25%
- Account types. Individual, joint, trust, traditional IRA, Roth IRA, SEP IRA, 529s
- Asset types. ETFs
- Account minimum. $500
Wealthsimple
Wealthsimple’s fees are higher than Betterment’s, but it offers the distinct perk of human advisory services.
- Consider switching from Betterment if: you want one-on-one access to financial advisers.
- Best for: investors who don’t mind higher management fees for added investment guidance from financial planners.
Wealthsimple offers a number of the same features as Betterment, including tax-loss harvesting, dividend investing and a wide variety of accounts. But unlike Betterment, it provides access to human financial advisers for all of its account holders, regardless of their tier of service. Plus, it offers Halal investments compliant with Islamic investment principles.
- Management fee. 0.5%
- Account types. Individual, joint, trust, traditional IRA, Roth IRA, SEP IRA
- Asset types. ETFs
- Account minimum. $0
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.
How to transfer your brokerage account
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.
Compare robo-advisors today
Disclaimer: The value of any investment can go up or down depending on news, trends and market conditions. We are not investment advisers, so do your own due diligence to understand the risks before you invest.
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