Betterment Review 2024: Long Term Automated Investing

Bobby HallJanuary 7, 2024

Betterment offers leading Robo Advisory services for investors seeking diversified portfolios with a low annual fee. Using an all-in-one dashboard, you can connect your accounts and manage your finances all from one place. 

Overall rating

Reviews

Features

HQ	New York, United States
Fees	0.25% – 0.40%
Account Minimum	$0
Accounts	Traditional IRA, Roth IRA, SEP IRA, Roth Conversion, Taxable account
Access	Website, Mobile App (Android or iOS)
Portfolio Rebalancing	Available
Tax Loss Harvesting	Available
Automatic Deposits	Available
Advisor	Available
Fractional Share	Not Available
Socially Responsible Investing	Available
Smart Beta	Available
State Restrictions	Available in all States

In depth review of Betterment  

Betterment aims to help investors grow wealth and reach their goals. Whether you’re looking to retire early or invest in a home, Betterment provides investors with the tools to set goals and manage finances.  

Betterment is best for 

• Socially responsible investing: Invest with the framework of your values in mind. With Betterment, you can use your dollars to have a positive impact on the world and causes you believe in.  
• Diversified portfolio: You can invest in ETFs that will help you grow your money over the long term.  
• Low fees: Betterment aims to keep fees transparent with one low annual flat fee of 0.25%. 
• Tools to track goals: Whether you’re looking to save for a dream home or vacation, Betterment offer tools to help you set your financial goals.  

Betterment benefits 

• Keep track of finances: You can keep track of your progress and manage your finances when you connect all your accounts to Betterment. 
• Auto-adjust: Your portfolio is auto-adjusted as new and better funds become available. 
• Automatic deposits: You can set up reoccurring deposits to keep you on track with your investment goals.   
• Tax-loss harvesting: At no additional cost, Betterment will sell securities that help to lower your tax bill.  
• Discount for high balances: For balances over $2 million, there is a 0.10% reduction in fees. 
• Satisfaction guarantee: Betterment provide a satisfaction guarantee to all its customers. If you’re not satisfied with the advisory services provided, Betterment will waive fees on your account for up to 90 days.  

Betterment drawbacks 

• Higher fees for financial advice: Betterment offers financial advice to investors with a minimum balance of $100,000 and for a slightly higher fee of 0.40%.  
• Limited customer service: Customer service is only available by phone on weekdays. If you’re looking for more extensive customer support, it could be a good idea to seek traditional advisors with greater capacity.  

Account opening 

5

Betterment Securities supports a range of accounts including: 

• Roth IRA  
• Traditional IRA  
• SEP-IRA (single participant only)  
• Inherited IRA 
• Individual taxable accounts 
• Joint taxable accounts  
• Trust accounts 
• Cash Reserve 

To start investing with Betterment you can sign up on the website.  It’s a good idea to have the following information to hand:

• Name   
• Email address  
• Date of birth  
• Social security number  
• Residential address 

Betterment is available for US citizens over 18 years old. You’ll need to have a permanent residential address in the US and a social security number.  

Fees 

4.5

Betterment adopts a low-cost approach charging a 0.25% advisory fee for the digital investing plan. For the premium plan, investors must have a minimum balance of $100,000 and are charged a 0.40% fee.  

Higher balances receive a reduction of 0.10% when balances exceed $2 million. This lowers the fee to 0.15% for the digital investing plan and 0.30% for the premium plan.  

Fees are debited from accounts at the end of each month and are calculated using the average daily balance of your account.  

To view the latest pricing plans, visit Betterment’s website.   

Deposit and withdrawal 

4

The best way to deposit funds or withdraw from your investment account is to use ACH transfers. These are fast and easy to set up, and you can also set up reoccurring deposits.  

There’s a daily electronic transfer limit of $300,000. Deposits above this amount will require a wire transfer. Betterment does not allow checks or debit cards as these are costly to process.  

Product offerings 

5

Betterment offers a digital investing plan or a premium investing plan to its customers. The plans include:

Digital investing	Premium investing
0.25% annual fee	0.40% annual fee
$0 minimum balance	$100K minimum balance
Low-cost investing portfolios tailored to your risk tolerance and goals	All the features of Digital investing
Socially responsible investments	Unlimited calls and emails with a team of financial advisors
Multiple account choices, including trusts and IRAs	In-depth advice on investments held outside of Betterment
Automatic features like portfolio rebalancing, dividend reinvestment, and auto-adjust
Advanced tax-saving strategies, including tax-loss harvesting and asset location
Checking and Cash Reserve at no additional cost

Portfolio construction 

5

Betterment provides a range of expertly designed portfolios to help you meet your goals and grow your wealth over the long term.  

Portfolios include: 

• Core: Invests primarily in U.S. companies with a focus on companies that are undervalued in the market. 
• Innovative technology: Invests primarily in the U.S. and global companies focusing on clean energy, semiconductors, robots, nanotechnology, and more. 
• Broad impact: Supports investments that have a greater social responsibility and long-term positive impact on the planet.  
• Climate impact: Invests in companies with a focus on lower carbon emissions. 
• Social impact: Supports conscious values, including social equity and minority empowerment. 
• Goldman Sachs smart beta: Invests in undervalued companies with the potential to out-perform the market over the long term.  
• BlackRock target income: Focuses on bonds to generate income and preserve wealth for investors approaching retirement.  
• Cash reserve: A cash portfolio that pays 0.75% APY. 

Portfolio management 

5

Betterment rebalances your portfolio when your investments swing away from their target allocation. Rebalances correct the allocation and keeps you on track with your investment goals.  

Buy and sell rebalancing is automatically triggered when your allocations drift by 3% or more. Alternatively, your portfolio may rebalance due to manual changes in your allocation. 

Education 

5

Betterment provides a library of articles to help you build your investment knowledge as you grow your wealth. Topics can include: 

• Expert insights 
• Keeping your finances on track 
• News 
• Products 
• Debt 
• Retirement planning 
• Buying real estate 
• Saving money 
• Using IRAs 
• Investment portfolios 

In addition, there are various tools available to help you make better investment decisions. These include: 

• Retirement planning: Calculate how much you need to save for retirement and make adjustments to your strategies as you approach retirement age.  
• Track your goals: Whether you’re saving for a home or a dream vacation, you can set goals and stay on track to achieve them. 
• All-in-one dashboard: Connect your accounts, track your deposits, spending, and transfers, and manage your finances all from one place.  

Customer service 

5

To get in touch with Betterment, you can call (718) 400-6898 Monday to Friday, 9:00 am-6:00 pm (ET). There is also a chatbot available on the website where you can talk to a virtual assistant.  

In addition, there is a comprehensive FAQ and help center available on the website which could help answer some of the most common questions.  

Safe and secure 

5

With Betterment your securities are SIPC insured for up to $500,000 (up to $250,000 for cash claims). In addition, cash reserve accounts are FDIC-insured up to $1 million, and cash funds in your checking account are FDIC-insured up to $250,000. 

Is Betterment right for you? 

Betterment is a great option for investors looking to grow their long-term wealth at a low and affordable cost. There are no minimum balance requirements, and you can choose from a broad range of funds that best fit your investment profile.  

Investors requiring financial advice can upgrade their account to the Premium Investing Plan, where you can benefit from unlimited calls and emails with professional advisors. However, this does require a minimum balance of $100,000, and fees increase to 0.40%.  

Whether you’re just starting or you’re an experienced investor, Betterment delivers value, flexibility, and expertise at a low and affordable cost.