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Betterment Review

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Summary: A well-known online robo-advisor, Betterment features $0 trades with a 0.15% to 0.35% annual fee on all investments (depending on the total balance). Betterment makes it easy for anyone to start investing in the stock market without any prior knowledge by automatically selecting an appropriate ratio of stocks and bonds, based on the investor’s age, time horizon, and goals. Rather than investing in individual stocks, each dollar is spread across hundreds, if not thousands, of companies. This provides investors with a significant level of diversification, reducing their risk in the process. The interface is easy to use and understand, making this one of the top players in the field at the moment.

Quick Facts

Minimum investment: No minimum investment and no minimum balance.

Fractional shares allowed: Yes.

Customized financial advice: Yes.

24/7 customer service: Not available 24/7. Phone, email, and chat support are available during business hours and on weekends.

Fees: 0.25% annual fee. No cost to purchase securities.

Investment options: Limited selection of stock and bond ETFs. Although investors can adjust the stock to bond ratio, they cannot invest all their money into a single ETF.

Automatic rebalancing: Yes.

Tax-sheltered retirement accounts: Yes.

Smartphone app: Yes.

Tax loss harvesting: Yes.

Betterment is currently one of the leaders in the field of robo-advisors. Although they offer a relatively limited number of investment options, the combination of their simple interface, low fees, and the customized advice allow anyone to start investing without any prior knowledge of the stock market or large sums of money. Highly recommended.

Last updated: 4/4/2017

 

Full disclosure: At this time, the author has an account with Betterment.

 

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