Betterment is one of the pioneers of the robo-advisor approach to investing. After more than a decade in the industry, we believe no other platform delivers more value to its customers than Betterment.
Improvement scored high in all categories. The Betterment Digital base level of service charges a competitive annual fee equal to 0.25% of your balance, and there is no minimum balance requirement. Savers with higher balances looking for more advanced services can take advantage of Betterment Premium, which provides access to online financial advisors.
Create an account, choose your goals and enter some personal information, and Betterment puts you in a portfolio of exchange-traded funds (ETFs) suited to risk. Note that your portfolio will include ten ETFs, some of which may charge high fees. This is not an optimal approach, in our opinion, as you can get all the diversification you need with just three or four ultra-low-cost ETFs.
A note for those who choose the emergency fund option: you might find yourself in a portfolio (made up of 15% stocks / 85% bonds) that is a little too risky for your blood. If you need the cash after a layoff due to an economic downturn, chances are you’re selling low.
Betterment also offers alternative portfolios to choose from, including one focused on environmental, social and governance (ESG) factors. The platform provides an automatic harvest of tax losses as well as a fiscally coordinated portfolio option that structures your allocation of stocks and bonds to optimize your tax treatment.
In addition to a standard taxable account option, long-term savers should check out Betterment’s retirement accounts, including a choice of traditional individual retirement account (IRA), Roth IRA, and SEP IRA option for homeowners. small businesses.
Once you have $ 100,000 in your account, you will be eligible for the Betterment Premium service level, which includes unlimited consultations with Betterment financial planning professionals and a higher annual fee of 0.40%. If you prefer the lower 0.25% fee, you can choose to stay on the Betterment Digital service level with balances over $ 100,000.