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Betterment Investing is best for hands-off investors who want to take advantage of professionally built, personalized ETF and cryptocurrency portfolios. The platform offers CFP access so that it could suit those seeking additional guidance from human advisors. One downside is that you'll need at least $100,000 for ongoing CFP guidance.
Business Insider's personal finance team compared Betterment Investing to the best IRA accounts and the best robo-advisors. We found it an industry leader and named it to both lists.
Introduction to Betterment
Betterment Investing is our top pick for the overall best robo-advisor for personalized, self-managing investment portfolios. Betterment mainly offers stock and bond ETFs, cryptocurrencies, and ESG funds. You can even select a pre-built diversified portfolio to align with your goals, like paying for a wedding or buying a home.
Access Betterment's low-cost investment management for a wide range of investment portfolios curated for crypto trading, socially responsible investing, or high growth potential. Experienced investors can unlock even more control with Betterment's Flexible portfolio option to tweak your asset class weights.
Automated investing with Betterment's robo-advisor is a strong choice for beginners and passive investors seeking tech-driven robo-advising services to reach their goals. Investors who want their investments to reflect their values around social, governance, and environmental issues will get the most out of Betterment's pre-built funds.
Unfortunately, Betterment isn't the best investment app for human advisor access unless you can afford the Betterment premium plan. To unlock premium benefits, you need a $100,000 minimum account.
How Betterment Works
Automated portfolio management
Similar to other robo-advisors like Streetbeat, Betterment brokerage accounts use computer algorithms to build and manage personalized portfolios. Its pricing plans are simple to follow. It offers two options:
- Betterment Digital: With a $0 minimum deposit requirement, unlock tax-loss harvesting, asset location, portfolio rebalancing, and dividend reinvesting. Plus, to maintain a healthy level of risk, Betterment automatically adjusts your portfolio allocation as you get closer to meeting your goals. This level also offers a range of portfolio options but doesn't include complimentary advisor access.
- Betterment Premium: You'll need at least $100,000 for the premium account, but you'll get access to all of the features the digital plan offers, in addition to unlimited one-on-one CFP guidance. Its CFPs also offer advice on other investments you hold outside of Betterment.
You can additionally invest toward specific goals with Betterment, such as paying for a wedding, saving toward future education, buying a home, or building general wealth.
Betterment automated portfolio management is also available for traditional, Roth, Rollover, and SEP IRAs.
In addition, Betterment provides simplified trust fund management to track your returns, diversify investable assets in your trust, automatically rebalance your portfolio, reinvest your dividends, and even automate cash transfers for beneficiaries.
Betterment Crypto-trading
Betterment offers personalized, diverse cryptocurrency investing for a separate annual fee of 1%. This fee is quite competitive, given that some crypto exchanges charge spread fees of up to 1% per transaction.
Betterment has a weekly newsletter for up-to-date market news. Crypto accounts also come with automated portfolio rebalancing.
The platform gives you access to four different crypto portfolios:
- Universe: This portfolio exposes you to a diversified range of crypto assets while mitigating risk for maximized returns. Invest in coins like bitcoin, ether, litecoin, bitcoin cash, dogecoin, and much more. It also invests in cryptocurrencies advancing digital commerce and virtual experiences.
- Sustainable: The sustainable portfolio is best for those looking to make a positive impact with their investing. It focuses on cryptocurrencies that aim to reduce carbon emissions, and Betterment specifically targets investments that use less energy to validate blockchain transactions. Ether, solana, and chainlink are among its holdings.
- Bitcoin/Ethereum: Invest in two of the largest cryptocurrencies for increased liquidity. The portfolio generally invests 70% of your assets in bitcoin and 30% in Ethereum. The actual portfolio holdings break down as follows: 68.60% in bitcoin, 29.40% in Ethereum, and 2% in US Dollar.
You can invest simultaneously in a crypto portfolio and a traditional ETF portfolio if you want, but you'll have to account for both advisory fees.
Betterment implements two-factor authentication and several other security measures to keep your accounts safe. These include identity verification, transaction review, automatic logout, account ownership verification, system outage protection, and more.
Betterment Portfolio Types
Here are some of the personalized portfolios by Betterment available to investors:
- Core portfolio: Focuses on long-term investing by allocating money across a global selection of international stock and bond ETFs.
- Innovative technology portfolio: Targets companies with a lot of growth potential. These include semiconductors, blockchain businesses, clean energy companies, and more.
- Goldman Sachs Smart Beta portfolio: This low-cost, high-risk portfolio aims to invest in companies with the potential to outperform the market.
- BlackRock Target Income portfolio: Works to protect your assets against loss by investing 100% in bonds with different income yields for protection against stock market risk and volatility.
- Socially responsible portfolios: There are three available socially responsible portfolios of stock and bond ESG funds. You can choose to invest in the Broad Impact portfolio, Climate Impact portfolio, or the Social Impact portfolio. These options are ideal for those who want to make a positive difference with their investments.
- Value Tilt: Asset allocation of globally diverse stocks and bonds "tilted" toward undervalued US companies.
- Flexible portfolio: Experienced investors can opt in for a flexible portfolio to tweak their Core portfolio's asset class weights. Plus, investors get access to additional asset classes like high-yield bonds, REITs, and commodities. Keep in mind that this may exposure your portfolio to a higher level of risk.
Betterment Fees
Betterment charges a $4 monthly fee as the base price for investing accounts. This monthly fee automatically switches to a 0.25% annual fee if your total Betterment account balance exceeds $20,000, or if you set up recurring deposits/transfers of $250 per month.
Crypto portfolios charge a 1% annual fee. Plus, there's a 0.15% fee per crypto trade. Betterment Premium requires a $100,000 minimum deposit and a 0.40% annual fee.
You may have to pay fund fees when you trade ETFs. Betterment also charges a flat $75 when you transfer your investment account out of Betterment. There are no withdrawal fund fees or additional trading and deposit fees.
Betterment Pros and Cons
Betterment Pros
- Transparent fee structure
- No minimum deposit requirement
- Expert-built curated portfolios
- Offers goal-based financial planning, tax-loss harvesting, and ESG portfolios
- Access to CFPs
Betterment Cons
- Annual fees between 0.25% and 0.40%, depending on the plan option
- Must have a premium plan to access human advisors
Betterment Trustworthiness
The Better Business Bureau gives Betterment a D- rating. Ratings range from A+ to F and reflect the bureau's opinion of how well a company interacts with its clients. The BBB says Betterment's rating stems from the fact that it has received many complaints, including three that are unresolved.
Bureau ratings don't guarantee a company will be reliable or perform well. However, they consider several other factors, including type of business, time in business, customer complaint history, licensing and government actions, and advertising issues.
On April 18, 2023, the SEC charged Betterment LLC for failing to provide account holders using tax-loss harvesting services with notice of contract changes. Betterment also allegedly failed to maintain certain required books and records. Betterment has agreed to pay a $9 million penalty to settle the case.
Betterment Cash Reserve Account
If you like Betterment's brokerage accounts, you may want to check out Betterment's cash reserve account. The cash reserve account isn't an investing account but a high-yield savings account with a 5.00% (5.50% APY for new customers' first three months) annual percentage yield (APY).
Betterment is primarily an investing platform, but the convenience of having your checking account or cash reserve account on the same platform can be a huge perk. The Betterment Cash Reserve account requires a minimum deposit.
Betterment Alternatives
Betterment vs. Wealthfront
Betterment and Wealthfront Investingare two of the oldest platforms in the robo-advisor space. Both offer automated portfolio management, with access to perks like cash accounts, tax-loss harvesting, socially responsible investing, and more.
Betterment offers financial advisor guidance, but Wealthfront doesn't. Betterment also has a lower account minimum requirement than Wealthfront. You don't need anything to get started with the Betterment digital plan. Wealthfront, however, has a $500 minimum.
Wealthfront is a better option for users who want access to a wider range of investment choices. Plus, it's great for those who want to automate custodial accounts like 529 plans. Wealthfront also offers DIY investing for stocks — you'll just need to open a separate stock investment account, which only requires $1 to get started.
Wealthfront review
Betterment vs. Vanguard
Betterment and Vanguard both have automated investing, but Vanguard is the stronger choice for more types of investments. With Vanguard, you get access to both self-directed accounts and automated accounts. But you'll be limited to automated investing at Betterment, so it's not a great choice for those who want access to DIY trading strategies.
Betterment is a more affordable option for beginners although it charges a 0.25% annual fee (or $4 monthly fee) when Vanguard Digital Advisor only charges a 0.20% fee. However, Vanguard's robo-advisor requires a $3,000 minimum deposit.
Vanguard Digital Advisor review
Why You Should Trust Us: How We Reviewed Betterment
We examined Betterment using our rating methodology for investing platforms to compare and examine account types, pricing, investment options, and overall customer experience when reviewing investing platforms. Platforms are given a rating between 0 and 5.
Investing platforms offer multiple assets, trading tools, fees, and other resources. Some investing platforms are better for more advanced or active investors, while others may better suit beginner and passive investors. Betterment was evaluated with a focus on how it performed in each category.
Business Insider's Overall Betterment Rating
| Feature | Insider rating (out of 5) |
| Fees | 4.50 |
| Investment selection | 5.00 |
| Access | 4.80 |
| Ethics | 4.50 |
| Customer service | 4.75 |
| Overall score | 4.60 |
Betterment — Frequently Asked Questions (FAQs)
What is Betterment, and what services does it offer?
Betterment is a low-cost robo-advisor that offers a wide range of automated ETF portfolios, socially responsible investment funds, crypto-exposure, and goal-based investment strategies. Unlock tax-advantaged investing, auto-rebalancing, retirement planning resources, and more.
How does Betterment create personalized investment portfolios?
Betterment creates a personalized investment portfolio based on your risk tolerance, time horizon, and investment goals. When signing up, you will fill out a questionnaire that Betterment takes into consideration to tailor your custom portfolio to your needs. Portfolios are then continuously automatically rebalanced to keep you on track.
What are the fees associated with using Betterment?
Betterment charges a $4 per month or a 0.25% annual fee. You'll unlock the 0.25% annual fee option automatically if your total Betterment account balance exceeds $20,000 or if you set up recurring deposits/transfers of $250 per month. Cryptocurrency portfolios require a 1% annual fee and a 0.15% fee per trade.
Is Betterment suitable for retirement planning?
Yes, Betterment is suitable for retirement planning. The brokerage not only has multiple IRA options, but retirement planning services offered by Betterment also include perks like automated rebalancing, dividend reinvesting, and access to other retirement-related tools. However, only Betterment Premium account holders can access unlimited CFP one-on-one guidance.
How does Betterment address tax efficiency?
Tax-loss harvesting strategies at Betterment for tax efficiency include allocating your portfolio across tax-advantaged accounts like IRAs. Investors can also offset gains tax to maximize after-tax returns by distributing investments and asset locations.
Investing and Retirement Reporter
Tessa Campbell is an investing and retirement reporter on Business Insider’s personal finance desk. Over two years of personal finance reporting, Tessa has built expertise on a range of financial topics, from the best credit cards to the best retirement savings accounts.ExperienceTessa currently reports on all things investing — deep-diving into complex financial topics, shedding light on lesser-known investment avenues, and uncovering ways readers can work the system to their advantage.As a personal finance expert in her 20s, Tessa is acutely aware of the impacts time and uncertainty have on your investment decisions. While she curates Business Insider’s guide on the best investment apps, she believes that your financial portfolio does not have to be perfect, it just has to exist. A small investment is better than nothing, and the mistakes you make along the way are a necessary part of the learning process.Expertise:Tessa’s expertise includes:
- Credit cards
- Investing apps
- Retirement savings
- Cryptocurrency
- The stock market
- Retail investing
Education:Tessa graduated from Susquehanna University with a creative writing degree and a psychology minor.When she’s not digging into a financial topic, you’ll find Tessa waist-deep in her second cup of coffee. She currently drinks Kitty Town coffee, which blends her love of coffee with her love for her two cats: Keekee and Dumpling. It was a targeted advertisem*nt, and it worked.
Compliance Associate
Elias Shaya is a Compliance Associate on the Personal Finance Insider team based in New York City, whichensures content accuracy and editorial independence so readers are always getting up-to-date and objective financial advice.The team also works to minimize risk for partners by ensuring language is clear, precise, and fully compliant with regulatory and partner marketing guidelines that align with the editorial team. Elias is the point person for the loans sub-vertical and works with the editorial team to ensure that all rates and information for personal and student loans are up-to-date and accurate.He joined Insider in February 2022 as a fellow on the compliance team.
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