Betterment review

Overview

Fees	★★★★★ 4/5	Its 0.25% management fee is on par with competitors.
Minimum deposit requirement	★★★★★ 4.5/5	No requirements for the basic tier, but premium accounts need a $100,000 minimum deposit.
Account selection	★★★★★ 4.5/5	It has plenty of accounts to choose from, including retirement accounts and 401(k)s for employers.
Tax advantages	★★★★★ 5/5	Basic and premiums accounts are both equipped with tax-loss harvesting.
Customer support	★★★★★ 5/5	Support is available by email, phone and live chat.
Customer feedback	★★★★★ 3/5	Trustpilot and BBB reviews are mixed.
Mobile app	★★★★★ 4.7/5	Its mobile app is liked by both Android and Apple users.

To learn how our star ratings are calculated, read the methodology at the bottom of the page.

What we think of Betterment

As far as set-it-and-forget-it investing goes, Betterment is a solid bet for market newbies. Its sleek, clean interface makes for intuitive navigation, and its mobile app scores well among Android and Apple users alike. Plus, the platform is equipped with discrete tooltips that can help you learn more about unfamiliar investing terms and concepts — you know, if you’re into that sort of thing.

What we like most about Betterment is that it’s a low-pressure, low-commitment service. You don’t need to talk to a person ever, if that’s what you prefer. But reps stand at the ready to lend a hand by phone and live chat seven days a week.

Plus, it’s equipped for tax-loss harvesting: an investment strategy that sells down investments at a loss to help investors save on capital gains tax. Betterment also employs certified financial planners to help optimize your portfolio, but you’ll need to meet the account minimum for its Betterment Premium service: a hefty $100,000 minimum.

If it helps, think of robo-advisors like Betterment as a revved-up savings account — except with potentially better returns. The industry average for a high-yield savings account tends to hover around the 0.55% mark, whereas we’ve seen a moderate portfolio at Betterment average 9.7% over three years. But that portfolio also took a deep dip during the COVID market crash.

And while it fully recovered and went on to make even more over the next year, that temporary dip could have been a problem if the portfolio holder hadn’t been able to wait for the market to recover. When investing with any platform, there’s no guarantee your investments will perform well.

Portfolio performance

A team member at Finder who uses Betterment let us dig into her portfolio. She made an initial opening deposit of $2,030 back in 2018 and made no additional deposits. We took a look at the performance of her portfolio from June 18, 2018 to June 3, 2021. Here’s what we uncovered:

For comparison, Redditors claim Betterment returns of anywhere between 5.6% to 21.5% — with most reporting returns in and around the 10% mark.

Keep in mind that the average return of any portfolio depends on two factors. The first is your asset allocation strategy, which Betterment determines and sets based on your financial goals. The second is the broader performance of the overall market, which is tied to the US economy.

Fees and costs

Betterment’s investment plans are designed to cater to two different types of investors. The standard Betterment Digital plan has no minimum deposit and an annual management fee of 0.25% — on par with Wealthfront’s 0.25% fee and cheaper than the 1% Titan charges for accounts over $10,000. This plan is suitable for investors seeking a set-it-and-forget-it experience.

The Betterment Premium plan is best for investors with more capital who want access to personal account management services to optimize investments. A higher management fee applies, but the plan’s unlimited access to financial planners may be worth the extra cost for the right investor.

	Betterment Digital	Betterment Premium
Features	Personalized financial advice Globally diversified investment portfolios Automatic rebalancing Tax-loss harvesting	All the digital plan’s features Advice for investments outside Betterment Unlimited access to certified financial planners
Account minimum	$0	$100,000
Annual fee	0.25% + fund fees	0.40% + fund fees
Annual, transfer and closing fees	None	None

How do I sign up?

Here’s the process to get started with Betterment:

1. Navigate to the Betterment homepage and select Get started.
2. Create a Betterment account with your email address, name and phone number.
3. Choose from four financial products in your Betterment dashboard or hit Get started to answer a series of questions to get a personalized recommendation.
4. Enter your personal and financial information, including your address and Social Security number.
5. Confirm your email address.
6. Fill in your bank account details to set up your first deposit.

What portfolios are available?

Since Betterment is an automated investment service, you won’t get any research tools because you can’t choose specific securities. Instead, you’ll select an investment strategy based on your financial goals and risk parameters among Betterment’s portfolios.

• Betterment Core Portfolio. This portfolio strategy is based on the Modern Portfolio Theory, Nobel Prize-winning research for asset allocation, and is geared towards global diversification.
• Goldman Sachs Smart Beta Portfolio. A diversified portfolio with Goldman Sachs ETFs that strives to outperform conventional market-cap strategy with tax-efficient, low-cost, globally diversified stocks and bonds.
• Socially responsible investing. This portfolio favors investments in funds that meet social, environmental and governance criteria for socially responsible investing.
• BlackRock Target Income. Built by BlackRock, this low-risk portfolio seeks to minimize losses by investing exclusively in bonds.
• Flexible Portfolio. Investors who want more control over their asset allocation strategy can opt for Flexible Portfolio and adjust individual asset class weights based on their preferences.

What else can I do with Betterment?

Betterment is best known as an investment app. But it can also be put to work as a more holistic finance app thanks to its lineup of additional accounts and services.

• Checking account. Betterment’s checking account has no minimum balances, no maintenance fees and offers ATM and foreign transaction fee reimbursements, so your money is always at your fingertips.
• Savings option. Betterment’s savings account — called the Betterment Cash Reserve — comes with 5% APY and has no transfer fees or limitations.
• 401(k)s. Betterment operates as a full-service partner for employers interested in offering 401(k) accounts to employees.
• IRAs. Betterment’s lineup of individual retirement accounts includes traditional, Roth and SEP IRAs. It’s also equipped to facilitate 401(k) rollovers.

Pros and cons

Weigh out both sides of the coin before deciding.

Is Betterment legit?

Yes, Betterment is a legit financial advisor. It launched in 2010 and is headquartered in New York City. It maintains a B rating with the Better Business Bureau (BBB) and has 12 complaints to its name on the Consumer Financial Protection Bureau.

Betterment’s brokerage services are provided by Betterment Securities, an SEC-registered investment advisor and member of the Financial Industry Regulatory Authority (FINRA). Funds deposited into its Cash Reserve account are FDIC-insured for up to $1 million, and its checking accounts are insured for up to $250,000. The platform uses two-factor authentication to protect sensitive financial data.

Betterment reviews and complaints

Overall, Betterment receives a mixed reception from investors. As of April 2022, it isn’t an accredited business with the BBB but receives a B rating despite negative reviews.

BBB rating	B
BBB accredited	No
BBB customer rating	1/5 based on 15 customer reviews
Trustpilot score	2.8/5 out of 5 customer reviews
Google Play app	4.5/5 stars based on 9,112 reviews
Apple app store	4.7/5 stars based on 34,147 reviews
Customer reviews verified as of	April 2022

On a positive note, Betterment’s mobile app is well-received by both Android and Apple users.

Investors speak highly of its easy-to-navigate platform, automatic portfolio rebalancing and intuitive user interface. Common complaints include the platform’s unresponsive customer service and account withdrawal delays.

How do I contact Betterment support?

Get in touch with Betterment by:

• Phone. Call 646-600-8263 weekdays from 9 a.m. to 6 p.m. ET.
• Email. Send an email to support@betterment.com for a response from the team.
• Live chat. Speak with a rep on Betterment’s website weekends from 11 a.m. to 5 p.m. ET.

Alternatives to Betterment

Betterment’s clear interface and well-reviewed mobile app make it a viable option for those new to investing. It even has savings and checking accounts for those who prefer to keep all of their financial services under one roof. But no platform has it all, and Betterment is no exception.

Maybe you’d prefer to pay a predictable and consistent monthly fee for your robo-advisor. If that’s the case, look into Acorns — fees range from $3 to $12 per month based on your preferred plan.

Or maybe you’d like a little more say over your portfolio and want to try your hand at picking investments. If so, check out M1 Finance: It lets you pick your portfolio holdings but monitors and rebalances your investments on your behalf.

The right service for your investments is out there — it’s simply a matter of comparing investment accounts by features and fees to ensure you’ve found the right fit.

Compare Betterment to other platforms

Bottom line

With competitive fees, tax-loss harvesting, numerous account options and multiple portfolios to choose from, Betterment can accommodate both new and experienced investors seeking a robo-advisor. But you’ll need at least $100,000 to access the platform’s premium service, and there have been reports of account withdrawal delays.

Compare your options before choosing the right investment platform for you.

Betterment is not currently available on Finder

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