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Betterment is a financial services company that offers investment brokerage, savings, and cash management services to over 770,000 customers in the United States. Managing investments and saving up for retirement can be a challenging process that requires a lot of planning and calculation. Luckily, Betterment’s robust choice of assets, responsible cash management, and financial tools are available to anyone over the age of 18 with a valid social security number and living in the United States. The platform charges competitive fees for managing client accounts and provides various options, such as automated investing, customizable portfolios, IRAs, tax planning, etc.
Betterment manages over $32 billion on behalf of its clients who are using the platform to save up for retirement, home purchases, education, and vacations. Betterment offers passive investment strategies that are customizable and have different risk profiles, based on the preferences and background of the client.
"We've always believed at Betterment in long-term diversified investing, dollar cost averaging, keeping a horizon that is is long means that when you know the market dips you have an opportunity to just continue on your plan " - Sarah Levy
If you would like to passively invest a portion of your savings with Betterment and are curious about the features and benefits offered by the company - this investfox review is for you.
Betterment is a company that manages funds on behalf of its clients and constructs portfolios of varying risk profiles and asset exposures to meet its clients’ objectives. Using Betterment and similar software can help investors remove the hassle from the experience and place their funds in the hands of experienced professionals. In most cases, the clients who use Betterment are retirees or households saving up for specific purposes, such as education for their kids, buying a new home, car, etc.
Another popular service provided by Betterment is automated investing, which allows clients to set aside funds from their paychecks to invest through their Betterment accounts. Clients are invested in relatively low-risk assets, such as dividend stocks, ETFs, and bonds. However, they can also customize their investment strategy based on individual risk tolerance and objectives.
Clients seeking a more hands-on approach can access the premium plan after depositing a minimum of $100,000 into their accounts, which grants unlimited access to human advisors, as well as other perks we will discuss in the next sections.
Betterment is a well-rounded robo-advisor with a lot to offer its clients. The company comes with a breadth of features and has a sleek, user-friendly platform that is easy to navigate. Some of the core features of Betterment include:
Betterment has a balanced basket of offerings for passive investors and its breadth of features comes at a competitive price for most users.
Betterment offers standard and premium packages to its users. The standard Betterment account has no minimum requirements and users can invest from as little as $10. The offerings of Betterment include retirement accounts, such as Traditional, Roth, and Rollover IRAs, as well as trusts and non-retirement savings accounts. Users can choose portfolios with different risk profiles and optimize their tax liabilities while they wait for their investments to bear fruit.
The Automated Investing option offered by Betterment is one of the most flexible offerings by the robo-advisor. Clients can simply set up the account with basic background information about their objectives and investing preferences and Betterment proceeds to construct a portfolio to meet their needs. Betterment automatically rebalances the portfolio to maintain a stable risk level, while choosing the most tax-efficient methods of investment. Betterment also reinvests dividends received from investments and allows clients to make recurring deposits to increase the value of their accounts. Betterment automatically conducts tax harvesting to sell off loss-making investments to offset taxes for the client. The platform also prepares tax reports to show clients how much they might have to pay in taxes after making a withdrawal.
Betterment supports IRAs and 401(k)s and offers Traditional, Rollover, and Roth IRAs to its clients. Tax-loss harvesting and lower fees also help clients accumulate their savings faster with Betterment. Users can also set their ideal retirement age, location, and current savings to calculate how much they would have to invest in Betterment to reach those retirement goals.
Betterment also offers its retirement accounts to employers to integrate 401(k) plans for their employees.
The Betterment Checking account is a mobile-first banking solution with no fees. The Betterment debit card allows holders to shop and make payments hassle-free, as ATM and foreign costs are automatically reimbursed and overdraft fees are not applicable.
The checking account is FDIC-insured for up to $250,000 per account holder and users can change their PIN easily using their mobile phone. The checking account also offers cashbacks from thousands of shopping locations.
Clients can access the Betterment cash account, which offers 3.75% APY on savings, has unlimited withdrawals, and is FDIC-insured up to $1 million.
Betterment Premium is an account tier for clients who have deposited at least $100,000 into their Betterment account. The main draw of the Betterment premium account is the help of financial professionals and unlimited consultations with a Certified Financial Planner on various issues, including portfolio allocation, tax planning, etc.
The premium tier also includes an all-in-one dashboard to track all of your progress and savings on Betterment.
The single biggest advantage of Betterment that best encapsulates the services is variety. The platform offers automated investing, retirement accounts, cash management, premium services, and financial advisors, investing client funds in stocks, ETFs, bonds, and cryptocurrencies.
As far as robo-advisors go, Betterment’s range of investment options are some of the best on the market and they come at competitive prices as well. The company also offers tax harvesting, which is a feature that is lacking with some other platforms. All-in-all, Betterment is one of the most well-rounded services with plenty to offer to its prospective clients.
While Betterment does offer a robust financial advisory service, it is not accessible for clients unless they have deposited $100,000 or more with the company, which is a bit too steep for some users. However, even this does not detract from the fact that the fees charged by Betterment are quite low and are unlikely to deter any potential clients from using the service.
Betterment also does not offer direct tax-indexing, which is a feature that can be found with some of Bettermentt’s competitors.
Betterment prides itself on being a safe and secure place to invest your funds. Accounts opened with Betterment are FDIC insured for up to $250,000 in checking and $1 million in cash management accounts. This gives clients a money-back guarantee on the off chance that Betterment goes out of business with their liabilities left unfulfilled.
The SIPC also insures up to $500,000 in client assets, therefore, users should feel safe with their funds being in the hands of Betterment professionals.
Betterment charges a 0.25% management fee for accounts exceeding $20,000 in value. Those that are lower are charged $4/month. The platform has no account minimum requirements and users can start investing with as little as $10.
Clients who want to access Betterment premium will have to deposit at least $100,000 in cash or securities to their account, which grants access to financial advisory services on the platform.
Betterment also charges a 1% crypto trading expense to clients who invest in crypto through the robo-advisor. The Cash Reserve and Checking accounts do not charge additional fees.
Opening an account with Betterment is a simple and straightforward procedure. A user can register using the official website or mobile app by inputting their email address and creating a password. After that, Betterment will ask for some basic information to identify the user, such as a valid ID (driver's license, passport, etc.), primary phone number, residential address, social security number, etc. Once all of this information has been provided, clients can verify their accounts via email and phone and link their existing bank account and start customizing their Betterment experience by adding recurring payments, making deposits, and choosing an investor profile, as well as creating goals to track the progress as their investments are put to work on the platform.
Betterment is one of the most well-balanced robo-advisors on the market that offers automated investing, retirement savings, cash management, and checking accounts. Betterment clients have indirect exposure to stocks, ETFs, bonds, and cryptocurrencies through a variety of Betterment portfolios, which are constructed with the end client’s preferences and objectives in mind. The design of Betterment’s web platform and mobile app is intuitive and easily navigable, which makes for a convenient investing experience. Betterment has grown to be one of the most successful robo-advisors on the market today - with over 775,000 active users in the United States and more than $33 billion in assets under management.
"We have a mission [!at!] to make people's lives better and that mission is incredibly lofty incredibly, inspirational, and you'll notice that it doesn't include Finance specifically" - Sarah Levy
Another feature that sets Betterment aside from some of its competitors is tax-planning services such as tax-loss harvesting, which allows Betterment to reduce the tax burden for clients by selling loss-making investments.
Yes. Betterment is a regulated robo-advisor that offers passive investment services to its clients, including automated investments, retirement savings, cash management, etc. Client accounts are insured by the SIPC and FDIC, as required by regulations.
No. Betterment is not a brokerage firm and does not offer DIY trading to its clients. Betterment is a platform that is meant for passive investors who want their funds to be invested and managed by experienced professionals.
Yes. Betterment clients have the option of being invested in cryptocurrencies, alongside stocks, ETFs, and bonds. This depends on the overall objectives and risk tolerance of the investor.