Betterment Review: A Safe, Easy Way to Invest?

betterment review

Betterment is a platform that can increase your investment returns by 2.66%. In this Betterment review, we will analyze Betterment's capabilities, pros and cons, and how it performs alongside other investment platforms. Using a variety of strategies, Betterment enables you to keep as much of your investment returns as possible and gain the optimal rewards at every investment risk level. Typically, excessive fees, market timing, bad diversification, and other poor tax strategies can deplete investor returns. Betterment offers you the ability to gain the most from your investments using index-tracking funds, smart re-balancing, and better behavior.

What Is Betterment?

In this Betterment review, we found that this platform uses smart strategies, modern technology, and personalized guidance to save you money and time with your investments. Betterment works by learning about your financial life and goals. Then, it will build you a portfolio for investments based around your risk tolerance and timeline. Then, it will keep working with specific technology to make sure you gain the maximum amount of returns from your investments.

Product Specs

Betterment offers financial planning based on your specific goals and upcoming important events, such as switching jobs, if you have a baby, if you are buying a home, if you are retiring, and more. Further, we saw in this Betterment review that it provides you with retirement advice and help in rolling over your 401k to a Betterment IRA. Betterment also helps you to establish trust accounts with a single login. Betterment's Smart Saver yields an average 1.83% after fees, which is 20 times more profitable than an average savings account.

Also, we found in this Betterment review that it can assist with Tax loss harvesting to sell a security that has experienced a loss and offset taxes on both gains and income. Betterment will use its advanced technology to increase your portfolio value by about 15% over 30 years. Finally, you will have advice all along the way from financial experts to direct you with actionable advice and answers.

Pricing

Betterment's digital plan has an annual fee of 0.25%, which depends on the account balance. In this Betterment review, we found that this price includes personalized financial advice, low-cost and globally diversified investment portfolios, automatic re-balancing, advanced tax-saving strategies, everything in one place, reliable customer service, and access to licensed financial experts.

For a premium account, which requires a minimum balance of $100,000, there is an additional fee of 0.15%. The premium account includes all aspects of the digital plan plus in-depth advice on investments outside of Betterment and unlimited access to Betterment's CFP professionals for guidance on life events.

Betterment Review: How It Compares

We picked a few similar products available on the market to see how they compare.

Products

Company Logo

Overall Rating

Where To Invest

Betterment

betterment logo

5 Stars

Swell Investing

swell investing logo

4 Stars

Wealthfront

new wealthfront logo feature

4.75 Stars

TD Ameritrade

td ameritrade

4.5 Stars


betterment logo

This is an annual management fee.

Ease Of Use

Assembly Time

Design Quality

Warranty

Betterment allows you to visualize all of your investments in one place whether those are through Betterment or externally. This Betterment review found that each portfolio is designed for the specific investor, based on their goals and level of desired risk. It makes it easier for investors to see everything in one place. Further, Betterment provides you with access to a broad array of stock and bonds within the U.S. market and internationally to create a globally diversified portfolio.

Betterment recommends how much risk you should take based on your timeline and when you need access to your returns. Also, if you have specific questions, you can ask Betterment's Customer Support Team, available 7 days a week, and Betterment's licensed financial experts, available anytime.

This Betterment review found that portfolio assembly time was primarily based on your personal goals, timeline, and level of desired risk. The time that your portfolio will take to be assembled depends on your answers and goals.

Betterment is built upon Nobel Prize-winning research and develops portfolios from a mix of exchange-traded funds (ETFs) to ensure that investors gain the most from their returns. ETFs are heavily traded, as they are all open market hours. With the diverse trading activity of ETFs, they carry low liquidity premiums and equity-like transaction times. They are easier to trade on-demand and are less susceptible to fee discrimination across available investors.

Betterment selects the ETFs with exposure to the desired asset classes with the least differentiation between underlying asset class behavior and portfolio performance. Betterment constantly monitors its investment choices to ensure the validity of existing selection, to track potential changes in expense ratios, to monitor growing asset bases, and to watch changes in ETF market factors.

The amount you pay for Betterment's services depends on your account amount and is not a concrete fee amount, regardless of your account size. In this Betterment review, we saw that Betterment uses strong browser encryption to store all data in a secure facility. Further, Betterment protects against unauthorized activity and is committed to safeguarding against fraud. They have an advanced login protection with a two-factor authentication and app passwords.

Pros

  • Personalized and global diversified portfolio based on your goals and risk tolerance
  • User-friendly
  • Very intuitive
  • Links Betterment and external investments for one unified view

Cons

  • Not for investors that want to manage all the details themselves
  • No ability to change external accounts within the Betterment platform
  • Limited customization

swell investing logo

Swell is an investment platform that optimizes on opportunities presented by innovative companies that are growing. They focus around portfolios of publicly traded companies that are also high growth. These industries include renewable energy, green tech, disease eradication, clean water, zero waste, and healthy living. Swell is unique in that you will own shares of the companies you invest in rather than investing in mutual funds or exchange-traded funds.

This is an annual management fee.

Ease Of Use

Assembly Time

Design Quality

Warranty

With Swell, you build your own mix of companies across Swell's offerings and monitor your investments' progress using Swell's online platform. Swell allows you to invest in financially wise industries while also shifting corporate behavior by moving money to high-impact businesses. Investors cannot control their investments with Swell since Swell chooses the stocks using their algorithms. This makes Swell a great choice for those who want a hands-off investing experience while contributing to socially responsible entities. However, this means that it does not provide a lot of agency for the investor.

Opening a Swell account is easy. It requires basic information from investors and their personal preferences in terms of investing. This includes investors' current investment assets, risk tolerance, and investment time horizon.

Swell investments are not highly diversified, as they are primarily focused around small company, US based stocks. This means that investors are likely to see more dramatic ups and downs with their accounts. Further, Swell's algorithms are not highly conscientious of tax considerations on investors' accounts. This can make Swell a more expensive investment choice overall. The advantage to their algorithms is their selection of the most socially responsible companies by using objective data. This allows investors to know they are contributing to companies that add positive value.

The amount you pay for Swell's services depends on your account amount and is not a concrete fee amount, regardless of your account size. There are no trading fees, no price tiers, and no expense ratios.

Pros

  • Socially responsible investments
  • Straight-forward, all-inclusive fee
  • Low minimum requirement of $50 in account

Cons

  • Only offer individual accounts
  • Investors do not have control over investments
  • Potential for more dramatic swings in accounts

new wealthfront logo feature

With Wealthfront, they use software to execute investment strategies that deplete risk, reduce taxes, and decrease fees. Wealthfront develops a plan around your personal goals, whether that be planning for retirement, planning for a home, investing in your savings, or otherwise. They operate under the mentality that "fortune favors the smart, not the bold." Their foundation is passive investing, and they use a rules-based investment approach to deliver more returns without increasing risk.

This is an annual, advisory fee with no trading commissions or advisor salaries.

Ease Of Use

Assembly Time

Design Quality

Warranty

Wealthfront has a user-friendly platform, it offers a single stock selling plan, it allows you to transfer external funds and minimize capitals gains taxes, and it offers loans for existing customers if they are uninterested in selling their current investments. However, it does not supply someone to consult with, which could be a drawback for users.

Wealthfront uses your personal information and goals to create your diversified portfolio.

Wealthfront's rules-based investment approach is rooted in PassivePlus, their suite of investment features that performs tax-loss harvesting, stock-level tax-loss harvesting, smart beta (available at $500K), and risk parity. Their design is strategic rather than sporadic, and they operate with diversified portfolios of low-cost index funds.

Wealthfront protects investors' assets through SIPC Insurance, all fully-paid securities are held in street name at the Depository Trust Company, and there is no proprietary trading.

Pros

  • Passive and smart investing
  • External account support
  • Portfolio line of credit

Cons

  • Highly technological approach without someone to consult with
  • No fractional shares
  • Minimum investment of $500

td-ameritrade

TD Ameritrade allows their clients to pursue their financial goals through provided guidance, powerful trading tools, retirement resources, and more. It provides intuitive and powerful tools, and it allows users to trade and invest how they choose across a variety of equities, bonds, non-proprietary mutual funds, and forex trading. It allows investors to gain research and insights through streaming news and level II quotes, market insights, and more.

With TD Ameritrade, you pay a flat rate of $6.95 for an individual stock trade via the internet, $34.99 for a trade via Interactive Voice Response (IVR) Phone System, and $44.00 for a broker-assisted trade.

Ease Of Use

Assembly Time

Design Quality

Warranty

TD Ameritrade has a user-friendly website, a customizable sidebar, real-time quotes, and SnapTicket (a feature that allows you to make trades from any page instead of navigating back to a central page to buy or sell). They have 24/7 customer service via phone or email. This platform is designed for moderate to highly experienced investors and is not beginner savvy.

Since this is user-driven, it might take a while for you to customize your sidebar, become familiar with the trading tools, and adjust to the platform so you can optimize your trades. However, once you have a better understanding of what the platform can do and how you can customize it, you should be able to operate smoothly with its impressive research tools.

TD Ameritrade operates with highly efficient trading platforms. Through their web platform, you can access third-party research, planning tools, updated financial news, and social sentiment from Twitter insights. Through Thinkorswim, a professional-level trading platform, you can use elite level tools to perform analyses and test strategies, generate ideas with market scans, and use onboarding tools and tutorials. Also, TD Ameritrade is a leader in mobile trading.

TD Ameritrade protects its investors' information through their asset protection guarantee, leading-edge procedures that create a safe trading environment, and by providing trusted tools to safeguard assets.

Pros

  • 24/7 Customer Service
  • Great tools and resources, such as Thinkorswim
  • User-friendly website and software

Cons

  • Not beginner-friendly
  • High trade fees
  • Potential confusion with multiple apps and platforms

Conclusion

In this Betterment review, we found that Betterment allows investors to create a diversified portfolio at a low management cost. It optimizes for your returns, and it operates along your timeline and desired risk level. Further, it does not require a minimum investment amount, so it is great for people just starting accounts with smaller amounts.

It is a great portfolio for those with larger investments, as you can connect with Betterment's licensed experts and work with real people to invest in the smartest way possible. In this way, you still have control over your accounts with the help of highly efficient technology and professionals to steer you in the right direction, depending on your personal trajectory.

In comparing this Betterment review to other platforms and considering its full range of capabilities, we are giving Betterment 5/5 stars overall.

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