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Betterment vs. Vanguard

Both offer access to financial advisors — once portfolio minimums are met.

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Fair rates and comprehensive account selection make Betterment and Vanguard viable options for any investor. The choice comes down to your preferred investment strategy.
Which one is better?

Which one is better?

  • Choose Betterment if you’d like to use a robo-advisor.
  • Choose Vanguard if you want to buy and sell your own securities.

While Betterment and Vanguard both serve investors, they’re not built for the same type of investor. Betterment is a robo-advisor and Vanguard is a trading platform. Is one better than the other? Each platform has its perks, and the right choice for you will depend on what type of investor you are.

But Betterment and Vanguard do have a few things in common. They both offer a wide selection of accounts and have financial planners on deck to assist investors — though that’s where the similarities end.

For passive investors, Betterment’s 0.25% annual fee is on par with competitors and its investment services come equipped with automated tax-loss harvesting and portfolio rebalancing. But investors warn that the withdrawal process can be frustrating and time-consuming.

For active investors, Vanguard’s commission-free stocks, ETFs and mutual funds are an attractive perk and investors can become part-owners by buying into the platform’s in-house ETFs. But advanced derivatives trades may be deterred by pricey options fees and a lack of research tools.

How do Betterment and Vanguard compare?

BettermentVanguard
Betterment logo
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Vanguard logo
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OverviewBetterment is an online financial advisor that makes investing easy by creating a portfolio just for you, based on your preferences and financial goals. It’s a solid choice for those new to investing.Vanguard has no private owners, which allows it to keep operation costs low and give more back to its investors. It’s best suited to long-term investors.
Stock trade fee$0$7
Annual fee0.25%0%
Minimum deposit to open$0$0
Benefits
  • Diversified investments. A Betterment portfolio offers diversified investments across more than 10 asset classes.
  • Automatic rebalancing. Portfolios are adjusted daily as well as any time a contribution or withdrawal is made, or when dividends are received.
  • Certified financial planners. Investors can access Betterment’s certified financial planners by signing up for its premium service tier, Betterment Premium.
  • Tax benefits. Automated tax loss harvesting helps investors minimize taxes and increase their wealth.
  • Robust support. Betterment support is available seven days a week.
  • Commission-free mutual funds. While most platforms charge hefty trading fees for mutual funds, Vanguard is one of the few brokers that offer this security commission-free.
  • Investor-owned. Investors can buy into the platform by purchasing Vanguard’s in-house mutual funds and ETFs.
  • Personal adviser services. Investors with at least $50,000 are given access to a personal adviser by phone, email or video chat.
  • ETF selection. Vanguard offers over 1,800 ETFs with expense ratios as low as 0.14%.
  • Free account transfers. Many trading platforms charge $75 account transfer fees, but Vanguard doesn’t charge for account transfers.
Drawbacks
  • No direct indexing. Unlike competitor robo-advisors like Wealthfront, Betterment only invests in ETFs and doesn’t offer any direct indexing opportunities to its investors.
  • Minimum balance for premium service. Investors who want to access Betterment Premium need a portfolio of $100,000 or more.
  • Withdrawal delays. Investors withdrawing funds from their Betterment account warn that the process is tedious and can take weeks.
  • Options trading fee. Vanguard investors pay $1 per options contract — pricier than the industry average of $0.65.
  • Limited support. Customer support by phone is only available on weekdays from 8 a.m. to 9 p.m. EST.
  • High mutual fund minimums. Vanguard mutual funds require a minimum investment of $1,000.
Tools and research
  • Advice packages. Investors can connect with one of Betterment’s Certified Financial Planners for a flat fee of $199 to $299.
  • Investing calculators. Interactive quizzes and calculators help investors identify opportunities and streamline goals.
  • Article library. Betterment’s website is full of expert-written educational articles on banking and investment topics.
  • Portfolio Watch. Vanguard’s Portfolio Watch analyzes your holdings, identifies risks and seeks exposure opportunities.
  • Knowledge base. Investors have access to a number of articles on Vanguard’s website that cover a range of financial topics, from retirement planning and savings strategies to market fluctuations and economic news.
  • Retirement calculators. The platform’s retirement calculators are designed to help investors identify their assets and create a long-term investment plan.
Reputation and customer reviews
  • Reviews are: Mixed.
  • Customers praise: User-friendly platform and automatic rebalancing.
  • Customers complain about: Account withdrawal delays and unresponsive customer service.
  • Reviews are: Mixed.
  • Customers praise: Helpful financial advice from company advisers.
  • Customers complain about: Slow customer support and transfer request delays.
Apple App Store reviews

★★★★★ 4.6/5

★★★★★ 4.7/5

Google Play Store reviews

★★★★★ 4.3/5

★★★★★ 2.2/5

Support
  • Phone. Call 646-600-8263
  • Email. Send a request to Betterment’s customer service Monday through Friday, 9 a.m. to 6 p.m
  • Live chat: Available Saturday and Sunday, 11 a.m. to 6 p.m. ET.
  • Phone: Call 800-349-5814
  • Email: Click Send a secure message to fill in Vanguard’s email form.
  • By US Mail: Vanguard, PO Box 2600, Valley Forge, PA 19482-2600
Learn more

Read our review

Read our review

Bottom line

Both Betterment and Vanguard have their merits and are worthy of consideration. Let your preferred investment strategy guide your research and explore your brokerage options across multiple platforms.

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