Betterment is a great tool for beginner investors or those who trust the experts to do the heavy lifting. It’s a long-term investment site that automates your investments for you. You basically deposit an amount into Betterment, answer a few questions about your goals, and it will invest based on those goals, as well as alter investments based on the market, to make sure you are getting the most return on your money. Here’s a detailed look at Betterment.
- Best For: Automated Investing. Betterment is the lazy man’s best friend and is also great for anyone just starting out in investing, since it automates trading for you. All you do is fund your account and answer questions about the types of investments you want, and Betterment will do all the heavy lifting for you.
- Price: The benefit of Betterment is there are no complicated fees, just a percentage charged depending on how much you’ve invested. It’s 0.35 percent for under $10,000, 0.25 percent for $10,000-$99,999, and 0.15 percent for anything over $100,000.
- Features: Since Betterment is an automated service, it doesn’t offer a lot of options when it comes to investing. Its main platform invests in both stock and bond ETFs to create your portfolio. You can also set up various forms of IRAs through Betterment, which will then tailor your investments based on your goals.
- Other highlights: You can currently get three months of free trading if you invest more than $5,000 or six months free if you invest more than $100,000.
- Customer Service: Since Betterment does all the heavy lifting for you, of course there are going to be questions, which Betterment is more than capable of answering. You can also get financial planning advice via Betterment.
|Fees||Investing Options||Minimum Investment||STL Rating|
|0.35 percent of investment,
|Stocks and Bond ETFs, IRAs||$0|
What Is Betterment?
Betterment is an online investment adviser service that offers automated investment and wealth management. Betterment is a totally digital service; all transactions occur online, leading to less time and cost spent on investment management than with a traditional adviser or wealth manager. Those savings are passed on to you in the form of low annual rates and few to no fees.
Betterment is smarter than a traditional investment portfolio. Betterment’s portfolio selection methodology was built on Nobel Prize-winning research to help provide optimal returns and mitigate risk. Smarter technology and an improved overall investment experience mean that it’s easier than ever for people with little to no experience investing to select and grow a portfolio anywhere, anytime.
Betterment has been featured in Forbes, Fox Business, The Wall Street Journal, CNN Money and more because of its innovative, game-changing approach to how people can manage and grow their personal investments.
Betterment Investment Options
Betterment investing is seamlessly integrated in a blend of stock ETFs and bond ETFs. Betterment offers both stock ETFs and bond ETFs so you can balance the risk level of your investment portfolio; you can also personalize your allocation into stock ETFs and bond ETFs to manage risk at the level you’re most comfortable.
Betterment investing offers both ETF options for several reasons. First, it uses ETFs instead of mutual funds because they have lower expense ratios and they receive preferential tax treatment, making them a better overall investment vehicle. ETFs have also seen significant growth over the past ten years, making them smart long-term investments in a personal portfolio. Finally, ETFs are also fairly liquid, making them easier to trade when creating new portfolios or rebalancing existing portfolios.
Overall, Betterment’s portfolio offerings provide great options to both experienced investors and young investors looking to start and grow a personal investment portfolio.
Betterment Stock Market Funds
Betterment’s stock ETFs include a wide range of domestic and international markets and allow customers to choose the exact allocation and risk level of their portfolio. Their stock ETFs include:
- US Total Stock Market: Contains exposure to the entire US market, including small, mid-size and large capitalizations and allows participation of historically stable US economy for overall long-term, steady growth
- US Large-Cap Value Stocks: Overlaps with US Total Stock Market but includes more large-size companies
- US Mid-Cap Value Stocks: Overlaps with US Total Stock Market but includes more mid-size companies
- US Small-Cap Value Stocks: Overlaps with US Total Stock Market but includes more small-size companies
- International Developed Stocks: Provides diverse exposure to international companies from developed economies, including the UK, Japan and Europe
- Emerging Market Stocks: Provides a higher return potential, but comes with higher risk of investing in companies in developing nations
Betterment Bond Funds
Betterment invests in a diverse bond portfolio to balance risk and maximize customer returns. Betterment’s bond ETFs include:
- Short-Term Treasuries: Have maturities between one month and one year; very low risk
- Inflation-Protected Bonds: Issued by the US Treasury, insulates the portfolio from depreciating inflation
- US High-Quality Bonds: Provide exposure to US investment-grade bond market with relatively low risk
- National Municipal Bonds: Issued to finance capital expenditures; moderately low risk and federally tax exempt
- US Corporate Bonds: Issued by corporations to finance business activities; tend to offer more attractive yields
- International Market Bonds: Issued by non-US developed markets; tend to offer more attractive yields
- Emerging Market Bonds: Dollar-denominated bonds issued by developing economies
Personal Betterment Portfolio
Betterment offers a globally diverse mix of bonds and stocks, allowing you to manage your own risk by personalizing your portfolio. Because Betterment’s digital model allows for better expense ratios than traditional wealth management services, investors also take home more returns over time.
Betterment was built to make investment easier. People of all ages and experience levels can choose the right portfolio, no matter your personal knowledge, to reach your goals faster.
Betterment has a suite of products to allow you to manage your portfolio on all devices. They’ve even been called the “Apple of Finance” because of their attention to design and user experience. Both their desktop experience and mobile app feature an intuitive dashboard, easy navigation and easy-to-use interfaces that let you transfer and transact anywhere, anytime without needing to engage with a wealth management advisor. If you do need guidance, Betterment’s team of investment experts are available to help you make your investment decisions, and their team of customer service representatives are available to help answer any questions about Betterment tools.
Betterment offers RetireGuide, a tool that automatically calculates your retirement gap based on how much money you need and how much you have now. It takes into account your location, savings, income, tax rate and more to give the most accurate advice.
Once you know how much you’ll need to earn between now and your retirement, you can use one of Betterment’s two retirement services to start saving; they include a simple IRA or 401(k) rollover.
Betterment Simple IRA
Betterment makes it easy to transfer an IRA online with their automated tools. Using Betterment’s easy interface, you can enter the information on your account that you are transferring to Betterment, and Betterment will automatically generate the paperwork to process your transfer. You can even sign your form online with an e-signature to complete the process in just minutes.
Betterment 401(k) Rollover
You can also roll over your 401(k) to Betterment to use their automated investment engine to meet your retirement goals. This process can be a headache with some providers, but Betterment makes it easy to roll over your 401(k) and doesn’t charge a fee. You simply notify your current 401(k) provider that you’re rolling over your funds to Betterment, and then they release your funds by issuing Betterment a check.
Betterment offers three levels of services: Digital, Plus, and Premium. Each comes with its own annual fee and minimum balance requirements. Betterment is also able to offer fewer fees than traditional investment managers, including:
- No trade fees: Betterment does not charge fees to buy and sell securities.
- No transfer fees: Betterment does not charge when you make a deposit or a withdrawal.
- No rebalancing fees: Your Betterment portfolio is automatically rebalanced for free.
The most basic package, Betterment Digital includes unlimited access to automated portfolio management, tax-efficient investing features, investment advice and award-winning customer support for a 0.25-percent annual fee. Betterment Digital does not require a minimum balance. This plan is best for a novice investor who is looking to start a portfolio and is interested in managing it mostly on his or her own.
A step up from Digital, the Betterment Plus option offers all the benefits of Digital and includes additional features like an annual call with the Betterment CFP team and ongoing account monitoring by Betterment licensed experts. The Plus level has a 0.40-percent annual fee and requires a $100,000 minimum balance.
The most robust Betterment option, Betterment Premium, includes all Betterment Digital features as well as unlimited calls with Betterment’s licensed team of experts and additional ongoing account monitoring. The Premium level has a 0.50-percent annual fee and requires a $250,000 minimum balance. This plan is best for someone who wants the ease of digital wealth management but also appreciates a more hands-on, personal relationship with a wealth adviser.
Betterment is known to offer special promotions to new investors. Some previous promotions have included three months free with an initial $5,000 deposit, four months free with an initial $25,000 deposit or six months free with an initial $100,000 deposit. Contact a Betterment customer service representative if you’re interested in learning about current Betterment promotions as you start your portfolio.
Betterment for Business
Betterment offers an award-winning 401(k) service that includes personalized investment advice for each and every participant. Since Betterment handles the entire 401(k) experience from start to finish, they are one of the most cost-effective providers available to businesses.
Betterment for Business was started to add transparency to the retirement industry. Like Betterment, Betterment for Business comes with an intuitive dashboard and mobile access so participants can access their investments from anywhere, anytime. It is also free of fees and comes with personalized investment advice. Finally, like with Betterment, Betterment for Business customers can invest across both stock ETFs and bond ETFs to manage risk and personalize their portfolio to meet their needs.
Betterment Safety Net
Betterment can be a very safe way to invest. Because Betterment allows you to select your own portfolio, you can manage your risk accordingly, ensuring you set yourself up for financial success in your future. They offer both high-risk, high-reward investment options and low-risk, low-reward investment options – and everything in between.
Is Betterment Safe?
Your investment with Betterment is safe. Betterment has a team of finance, planning, trade and investment experts who are always working to evaluate and improve the Betterment portfolio – leading to bigger returns for you. All portfolios are liquid; you can access your money anytime, anywhere, making it a great safety net.
In terms of security and privacy, Betterment also protects your personal information. They use the market’s strongest browser encryption, and never share data with any third party without your permission.
Is Betterment Worth It?
Betterment is able to offer some of the lowest fees in the investment space because of their digital model. They keep costs low to keep your annual fees low too. Additionally, most of their services are free of fees. For example, they don’t charge trade, transfer or rebalancing fees ever, and are able to keep their annual rates at or below 0.50 percent. Because of their low-cost model, personalizable portfolio options and the ease of depositing money into and withdrawing money from Betterment, their model is fairly low risk.
Who Is Betterment Best For?
Betterment is a great solution for young investors looking to begin their investment portfolio on a digital, low-cost platform. Betterment is also great for someone who is more experienced in managing their personal investment portfolio but is looking for a simple and intuitive online tool to better manage and monitor their investments.
Betterment Customer Service
Betterment customers get access to an award-winning customer service team. Their dedicated support specialists are available seven days a week to help walk customers through their investment process.
Betterment Review Summary
Betterment is known in the industry for changing the investment landscape and using technology to improve the way people invest, manage their portfolio and ultimately shape their financial future. They have multiple pricing levels so that anyone – from young, brand new investors to seasoned investors – can benefit from their products.
Betterment offers three pricing levels:
- Betterment Digital includes unlimited access to automated portfolio management, tax-efficient investing features, investment advice and award-winning customer support for a 0.25-percent annual fee.
- Betterment Plus includes additional features, like an annual call with the Betterment CFP team and account monitoring by Betterment licensed experts, for a 0.40-percent annual fee.
- Betterment Premium features plus unlimited calls with Betterment’s licensed team of experts and additional ongoing account monitoring for a 0.50-percent annual fee.
Overall, Betterment’s software has many great features that can make starting or growing a portfolio easy and more profitable. Those features include:
- Maximum efficiency: Betterment keeps costs low by offering automated withdrawals, smart rebalancing and fractional shares, which means there’s no loss to a portfolio’s performance due to holding cash.
- Award-winning experience: Betterment makes investment easy, offering one-click deposits and withdrawals, award-winning reliable customer service and access and liquidity.
- Smarter investing: With Betterment, you will benefit from personalized investment advice, automated dividend reinvestment and intelligent tax management.
- Intuitive design: Betterment has easy-to-use dashboards available on mobile and desktop devices so you can access and modify your portfolio anywhere at anytime. You can also enjoy managing multiple portfolios from a single dashboard with a single log-in.
- Tax optimization: Betterment coordinates portfolios to leverage tax breaks, a strategy that can boost after-tax returns by an average of 0.48 percent each year, or an additional 15 percent over 30 years.
- Maximum security: Betterment uses top-of-the-line browser encryption and never shares your data with third parties without your permission.
- Online resources: Betterment offers a large collection of online resources on topics like investing, personal finance and retirement planning to help first-time investors understand the landscape and make the best decisions for the future.
- Qualified professionals: Betterment has a team of CFP professionals and licensed financial experts on hand, ready to give you advice based on your personal financial state and financial goals.
If you’re a first-time investor or someone who wants to improve his or her portfolio performance by using a more efficient and cost-effective investment adviser, consider researching Betterment to see if it’s right for you.