Betterment

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14 minutes read/20 May 2021

Betterment is an online investment company based in what many consider to be the global financial capital of the world, New York City. In this review, we will examine whether traders/investors should consider the company as a tool to help manage their money.

Two individuals founded the company in 2008. Jon Stein is a Columbia MBA graduate, and Eli Broverman, who was a Google software engineer in his prior role. The company has received funding from notable investors such as Bessemer Venture Partners and Menlo Ventures. Bessemer Venture Partners has also invested in high-profile IPOs like Yelped, Linkedin, Skype, Uber, Gilead Sciences, and Roku.

Broker Overview

Betterment Lower trading fees

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Take a look
😁 We really liked…
  • No minimum deposit size
  • Clear and easy-to-use website
  • Tax-smart technology
  • A tremendous amount of education available
  • Great promotions
😕 Could improve...
  • Not enough payment methods
  • Traditional investing options, but not much else
  • Lack of control
General Information
Website Betterment
You can trade Betterment ETF Review

Betterment Review Navigation

What Can You Trade?

#1 Betterment ETF Review

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Min Deposit App Support Max Leverage Trading Fees
$1 3000 1:1 Mid

Betterment’s primary focus is ETF trading – but here’s the issue: if you are interested in hands-on investing, this isn’t the platform for you. The robo-advisor will pick ETFs based on the questions you answer and the assets that you wish to allocate. Ultimately, they focus on stocks and bonds. The platform is designed to customise portfolios according to your needs and preferences.

Also is a registered investment advisor as well as a broker-dealer. The company has been quite successful, and currently has billions of dollars under its control. As of April 2019, had over $16 billion assets under management (AUM). The platform offers automated investing options and falls under the category of a “robo-advisor.”

The broker offers much more than many other management platforms. As well as guided investing, they offer cash management and retirement planning. The company are also a fiduciary, which means that they go out of their way to avoid conflict of interest.

What did our traders think after reviewing the key criteria?

Fees

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Betterment fees are quite competitive. The platform offers 0.25% for the standard account. If you choose to opt for the Premium account, this charge goes up to 0.4%, and if you are an extremely wealthy investor, you might be satisfied to know that a deposit of over $2 million will provide you with even lower fees.

Account Types

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There is a drawback here – and it’s the fact that the company doesn’t allow for direct indexing. It means that investors cannot purchase individual securities, which is one of the reasons Betterment might not make sense for those who want to be hands-on with managing their money. We found that their lack of variety concerning account types might be the most prominent “negative” of the platform.

SOCIALLY RESPONSIBLE PORTFOLIO

More investors than ever are interested in investing in companies that align with their particular set of values and ethics. The socially responsible portfolio allows for this, which is an excellent option for traders who care about the social impact of their investments.

BLACKROCK TARGET INCOME PORTFOLIO

This portfolio offers automated low-risk investing, which is ideal for those who are conservative when investing and have a tremendous amount of money to be managed. If you are close to retiring, for example – this might be a logical choice for you.

SMART BETA PORTFOLIO

This portfolio is compelling because it is a high-risk portfolio but offers a higher potential reward. It might be a solid choice for younger traders with disposable income who are hoping for higher returns.

PREMIUM ACCOUNT

Why choose a Premium Account? The answer is simple – you get access to financial advisors that can help you with your investments. If you are an investor who needs guidance, then this might be the platform for you. Unfortunately, this is only available to those who are willing to deposit $100,000 minimum.

Platforms

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betterment platform

The Betterment website has a blue and white theme and is very easy to navigate. The sections are clear, and users should have no problem finding what they are looking for. We have found that the website is user-friendly, even if traders/investors are not particularly tech-savvy. The site also offers a tremendous amount of information, for those who might have questions or concerns.

The mobile app is clean, intuitive, and also easy to navigate. It is incredibly modern, sleek, and convenient. The average customer rating for the iOs app is 4.8/5, out of over 18,000 reviews.
Both the website and app offer a significant amount of information. Many users praise both aspects of the platform.

Usability

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There are many well-designed websites out there for money management platforms, but the Betterment platform stands out. The top tab offers straightforward information on “cash” and “investing”, and a section for FAQs is available, as well.

The main page spells out the features quite clearly and appeals to those who might have different goals for their financial future. The bottom of the website separates information based on those who might want more education or information regarding investing. Both the Betterment website and app are straightforward to use and navigate.

Customer Support

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betterment awards customer service

Many financial companies and platforms allow traders/investors the opportunity to invest in a meaningful way, and the majority are easy to learn. However, the truth is that a lot of these companies noticeably lack when it comes to customer support. However, Betterment’s customer support sets a high standard.

They are available seven days a week, which is a massive plus for the platform.

If you wish to contact advisors for outside of their scheduled working hours’, you will have to pay for a premium account.

The FAQ section is quite informative and covers many of the questions that customers might have. Instead of searching through web pages and articles, investors can type in queries in a search box to find the answers that they need. There is also a page that breaks down the company, how it works, the fees involved, and how the platform operates as a whole.

Payment Methods

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Some investors like to use platforms that offer a plethora of payment methods. Unfortunately, Betterment does fall short in this particular case. The company only allows electronic transfer through an ACH network. It is quite disappointing that credit cards and debit cards are not allowed. The company claims it is because of fees associated with these deposits, but we are not sure about that claim. Some may find this frustrating.

They will allow payments of over $300,000 via wire transfer. However, it may take additional time if due to the size of the transaction. A wire transfer usually takes 4-5 days.

The broker does offer its own debit card which you will need to sign-up for. Some of the advantages of signing up to their checking account and receiving the debit card are that they reimburse ATM fees worldwide, there are no account or overdraft fees, and your money is secured up to $250,000.

Best Offers

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We found that Betterment has a tremendous amount of information that could benefit traders of all levels. One of the great things about the website is that it helps investors find information for their particular goals. For example, you can read about how you might want to invest if you’re going to make a significant purchase, such as a home. There is also information regarding investing for a safety net or retirement.

The beauty of the information provided is that it is tailored directly to you. The website asks questions about your age and annual income and returns data that might make the most sense for your portfolio. You will then get recommendations on what type of account you should open, and where you should invest. The companies education and research are WAY ahead of the competition.

Additional Offers

Many platforms use promotions to lure investors away from the competition, but many of the offers aren’t that exciting. Betterment offers some incredible offers and promotions, which might be the reason that it now manages billions of dollars.

The company will manage your money for free if you deposit $15,000 within the first 45 days of signing up. If you deposit more money, they will offer to manage your money for free – for up to a year! A rare offer in the robo-advisor sector.

You can also benefit from referring friends and family. The company will manage your funds for free for a month if a referral funds their account. The person referred will then get three months for free. Additionally, you can get an extra year for free if you refer three people. The only reason that the rating here is a 9/10 instead of a 10/10 is that we found that they do not offer a demo of any kind.

Many other platforms don’t offer any sort of charitable options. Through the Betterment platform, it’s possible to donate shares to charity DIRECTLY from your account. It is an impressive feature that should not be ignored and is an example of how it offers so much more than other platforms.

Regulation and Deposit Protection

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Brokerage services are protected through their Securities. Those Securities are registered with the Securities and Exchange Commission, otherwise known as the SEC. The SEC is the primary agency when it comes to regulating securities in the United States. That isn’t all – Securities are also a member of both FINRA and SIPC.

If some kind of hacking attack were to take place, investors would be protected for up to $500,000 of their funds. Checking is insured up to $250,000, as Betterment is insured by the FDIC, as well. That’s not all – Cash Reserve offers insurance of up to $1,000,000.

That is more protection than most, and the company shows the company focuses on operating within regulations and protecting their customers.

Awards

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Overall we have a very positive view of the broker, but we here at AskTraders are not the only ones with great things to say about the platform. Since its inception, it has garnered a significant amount of positive reviews and awards that have cemented and legitimised its spot in the robo-advisor sector.

betterment awards technology

The broker has featured in some of the most well-known financial outlets in the world, including Wall Street Journal, Forbes, and the New York Times. The platform won the 2017 Benzinga Fintech Award for best robo-advisor, as well. They also won a 2016 Wealth Management Award and were included in the 2019 Investopedia list of best robo-advisors.

There are a whole lot of positives to the platform. If you have goals and don’t mind a hands-off investing approach, Betterment might just be the platform for you. You can sign-up for free, and the low fees and wealth of information show that the company could prove to be a great choice. The customer support is also available seven days a week.

The only downside we feel is that there is a lack of investing options.

Betterment awards nobel prize winning

Betterment FAQs

To begin with, Betterment and Vanguard appeal to different segments of investors: Betterment with its low deposit and fund management fees is more suitable to the small investor. In contrast, Vanguard targets the wealthy investor. Next, Vanguard has its own funds while Betterment does not. Lastly, the Vanguard Personal Advisor is much bigger than that of Betterment in terms of AUM. Overall, Vanguard is superior in its niche, while Betterment is better suited for the small to medium sized investor.

Betterment is an online investment firm based in New York. Founded in 2008, Betterment is an SEC-registered investment advisor and broker-dealer with a FINRA/SIPC membership. The firm offers a range of products comprising cash reserve/checking accounts, tax saving investment plans, retirement income, IRAs and many more. Besides, your deposits with Betterment are insured. So, be it the security of your funds, the product range or the fees, Betterment has you covered and is an excellent broker to manage your investments.

Betterment manages a range of portfolios based on an investor’s risk profile. The average returns on three portfolios comprising 90%, 50% and 10% stock from 1st January 2004- 17th March 2020 was about 250%, 150% and about 50% correspondingly. That works out to about an average annual return of 15.6%, 9.3% and 3% respectively, over 16 years. Likewise, the average returns on the other portfolios could also vary. For additional information, you can visit Betterment’s website.

Yes, you can withdraw funds from Betterment. To initiate withdrawals, log in to your web browser, go to transfer or rollover, and withdraw. Betterment takes about 4-5 days to process withdrawal requests and does not charge any fees or penalties even for account closures.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage . 75 % of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money .