Fees and Deposit Limits8/10
Ease of Use10/10
Account Types and Services9/10
- No minimum deposit (with Betterment Digital)
- Great flexibility for hands-on investors (Betterment Plus and Premium)
- Full range of account varieties available
- No trade or transaction fees (Digital plan)
- $100,000 minimum deposit required for Plus and Premium plans
- Cannot work within current brokerage accounts
Is Betterment the ideal automated investing service for you? We’ll try to answer that question with our comprehensive 2017 Betterment review.
Betterment was one of the very first Robo Advisors in the world of online investing. According to recent estimates, the company is managing more than $7 billion worth of assets in 2017 and have more than 200,000 clients around the globe.
We’ll show you the pros and cons of the service so you can easily decide if the Betterment Robo Advisor is worthy of your attention for 2017.
Fees and Deposit Limits
First off, we’ll start our 2017 Betterment review by analyzing the management fees and deposit limits. Back in 2016, Betterment offered the distinct benefit of not imposing any transaction, trade or rebalancing fees. This Robo Advisor will either assess or rebalance fees according to your account balance.
But now, this only holds true if you choose the Betterment Digital Plan.
This is basically the traditional hands-off Robo Advisor that will give advice on how to save for your retirement, saving for other financial needs (buying a new house or purchasing a new car), and choosing the best IRA. You get all of this with no minimum balance, and it will only cost you 0.25% of your balance each year.
This is not bad. Considering the fact that the Betterment Digital Plan includes tax loss harvesting, automatic rebalancing, and tax-coordinated portfolios, this service will also allow you to sync all your external accounts, all without talking to a human financial advisor.
For 2017, Betterment is now offering two additional plans: Betterment Plus and Betterment Premium.
Betterment Plus will allow you to consult with licensed financial experts regarding the status of your investments. However, you only get one consultation per year. But in exchange for the paltry annual consultation, Betterment’s team of experts will notify you over the course of the year while keeping a close eye on your investment portfolios. You also get an unlimited email service. This plan requires a minimum deposit of $100,000 and will cost you 0.40% of your investment balance.
Betterment Premium is basically an upgraded version of Betterment Plus. Instead of getting just a single consultation each year, Betterment Premium will give you unlimited access to a team of licensed financial experts who will constantly monitor the changes in your investment account, even when you’re out sipping coconut water and soaking up the sun in Barbados.
This plan is perfect for those who own multiple assets or for those who simply want to be more involved while getting access to unlimited financial advice and unlimited email updates. The Betterment Premium Plan requires an initial deposit of $100,000 and has a fee of 0.50% based on your account balance.
Flexibility is a crucial aspect in our Robo Advisor reviews. We’ll give it to you straight: Betterment is a fully-automated investment service, but it diversified into a hands-on service by introducing Betterment Plus and Betterment Premium for 2017.
We believe this is Betterment’s way to attract more investors, specifically the big players who demand more control and flexibility in managing their accounts. Although the Plus and Premium plan come at a price, it is hard to fault Betterment when it comes to flexibility per se, but we wish that a lower account minimum is required to be a part of the elite.
However, kudos to Betterment for retaining the Digital plan. What this means is that upon signing-up and transferring your funds (and managing some early allocation decisions), the portfolio management process is taken entirely out of your hands.
Betterment takes control of reinvesting dividends and rebalancing the portfolio, so there is no need for you to do anything. Sounds perfect for newbie investors, right? It does, as long as you really prefer a hands-off approach to investing.
Check out these videos for an overview of how Betterment works:
Ease of Use
The whole point of using a Robo Advisor is to make your life easier and to help you make money from your investments. With that in mind, we’re proud to say that Betterment is easy to use, and it starts with the quick and simple sign-up process. After linking your checking account (for quick contributions and withdrawals) and answering a few questions about your allocation preference, you will immediately receive your first portfolio advice.
The Betterment site itself also has a number of handy tools to help you understand the different types of investments. One such tool will help to allocate your funds between stocks and bonds by giving allocation advice based on your age and retirement plans.
Betterment Digital remains one of the easiest Robo Advisors to use. It is a fully automated service which will automatically rebalance your portfolio and reinvest dividends with minimum supervision.
If you choose Betterment Plus or Betterment Premium, you can also talk to expert financial advisors so you can earn more money from your investments.
Account and Investment Types and Services
It is safe to say that an easy to use Robo Advisor with fair management fees is all well and good, but if it doesn’t offer what you need in terms of accounts and investment types, then you better look elsewhere.
In terms of account types, Betterment covers a full range of potential options by providing taxable accounts, Individual Retirement Accounts (IRAs) and even the Simplified Employment Pension version of those accounts (SEP IRAs) for individuals retiring from self-employment.
When it comes to types of investments, Betterment tends to focus on a selection of low-cost stocks bonds and Exchange Traded Funds (ETFs) depending on your initial allocation.
Once the investments have been made, the Robo Advisor will handle all the portfolio rebalancing and dividend reinvestment required. It also boasts a couple of features such as tax loss harvesting for taxable accounts worth at least $50,000, and a service that will purchase fractional shares to ensure that all the cash in your portfolio is rightfully invested.
Suitability for Different Investment Budgets
Betterment Digital is a solid choice for newbie investors. The lack of a minimum deposit makes Betterment easily accessible for any budget, big or small. You don’t have to pay trade, rebalancing or any transaction fees either. If you have a bigger sum to invest (upwards of $100,000) and you prefer the human element of financial advice, then you can choose between Betterment Plus and Betterment Premium. The choice is yours.
Betterment is one of the longest established Robo Advisors online. It should come as no surprise that Betterment is an excellent choice for newbie investors this 2017, especially if you choose Betterment Digital.
The full range of account types and the comprehensive features (including automatic rebalancing and dividend reinvestment) are impressive and added extras such as tax loss harvesting (for accounts worth more than $50,000) makes Betterment one of the best Robo Advisors around.
Overall, Betterment is a brilliant choice but we have to admit that the Premium and Plus plan is only suitable for investors with a higher budget to spend.